I sold my home but buyer is in breach

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06 Feb 2013

A Property24 reader asks:

A reader says she signed an addendum that the buyer would pay occupational rent, but this was not forthcoming. Why must she move without being paid and can she wait until transfer takes place?

I have sold my home but transfer has not yet taken place. 

I signed an Addendum with the purchaser to move out on the 21st. They would pay me occupational rent from the 21st until 31st, which came to R1 596. 

That amount was not available on this date for me to move. The occupational rent was to cover my move. But because they failed to pay me the occupational rent I could not move that day. 

So the Addendum was breached. Having been contacted by the buyer's lawyer and by the new-to-be owners and verbally abused to get out of my own property that is still legally mine until transfer takes place - I would like to know where I stand and what my rights are as an owner of property? 

Do I need to move out or can I wait until transfer takes place? 

Jaco Rademeyer from Jaco Rademeyer Estates responds: 

This matter relates to a Breach of Contract. It is my understanding that you, as the seller, entered into an agreement of sale of immovable property (offer to purchase) with the buyer. You must bear in mind that this is a contract and therefore all the general principles of the law of contract apply. 

An offer to purchase (agreement) has numerous clauses such as clauses relating to the purchase price, mortgage bond clause (if any), condition of property, passing of risk, occupation and possession, costs of transfer, default and so forth. 

You and the buyer signed the offer to purchase. The said agreement was subject to a further condition which was stipulated in the Addendum thereof, in particular, that you would move out on the 21st subject to the buyer paying occupational rent from the 21st until 31st, which came to R1 596. 

You must understand that the Addendum is not a new contract; it merely amends a clause in the original offer to purchase contract, in particular the “Occupation and Possession Clause”. Therefore, a breach of the Addendum amounts to a breach of the entire contract. In your circumstances, the buyer failed to fulfil a condition in the Addendum, in particular to make payment of the occupational rent on the agreed upon date, in other words, the buyer is in default. 

In terms of most default clauses, as the seller you must give the buyer or his agent if any, a written notice of the default and pleading that he/she must remedy the breach (in other words make the occupational rent payment). If the buyer does not remedy the breach within 7 (seven) days after you have given him/her the written notice, you will be entitled to cancel the contract, claim performance and damages. 

In simple terms, you do not need to move out until the buyer remedies the breach. On failure to do so, after written notice, you will be entitled to do the abovementioned. 

Readers may submit questions to Property24’s Guest Expert panel and/or comment below. We may not be able to answer all questions received, but all will be considered. 

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