November 01, 2024
Property

What is an Offer-To-Purchase a.k.a. Deed of sale? What are the important clauses to look out for in this document?

By Justina Hamupembe July 01, 2022 0
What is an Offer-To-Purchase a.k.a. Deed of sale? What are the important clauses to look out for in this document?

The offer to purchase (OTP) is a binding agreement between the purchaser and seller setting out the parties, the property description, and obviously the price that's been decided upon. And it must be reduced to writing.

Clauses to look out for:

voetstoots clause
What this means is that you are buying the property “as is”, with all the patents and the latent defects. Patent defects could be things that you can see with the naked eye. For example, a crack in the wall. Latent defects may be something that's found at a later stage. For example, leaks in the roof during the rainy season. That is why it is very important to make sure you inspect every room of the house for any defects with a knowledgeable person who can point out some of the things to keep an eye out for.

Disclosure clause
If there are key latent and patent defects that are a deal-breaker I suggest you put the fixture of those as a special condition in the OTP under the disclosure clause. Sometimes, the seller may not even be aware of certain defects. So, it’s a good idea to get a home inspector to identify these defects so you can make an informed decision about the property you are interested in purchasing.

Occupational Rent clause 
This clause is there for 2 reasons: the buyer may need to occupy the property prior to registration or the seller may need to occupy the property after registration. Ideally, the buyer should get access to the property as soon as the conveyancers have confirmed registration. And that is why it is important to have amounts negotiated upfront (if occupational rent is required by either party), as well as the time and specific date. The buyer will get access to the property.

Suspensive conditions clause 
The most common suspensive condition is the sale is subject to the purchaser obtaining a bond approval from the bank. It's a future event that needs to occur, and it's unknown when signing the offer to purchase. This allows the buyer to send the OTP to the bank and obtain the finance without being liable in terms of the agreements. It is important to note that there's a time frame attached to suspensive conditions. If the suspensive condition is not fulfilled within the time frame then the deal becomes null and void. Meaning it is unenforceable by law.

I think it's really important to understand the above clauses and ensure they are in your OTP to have a smooth transaction ensuring that all parties are protected. 

For enquiries Text,Call or email #yourhomegirl Justina Hamupembe 

Cell: +264812726001

Email. This email address is being protected from spambots. You need JavaScript enabled to view it. 

Website: www.chili.com.na

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Last modified on Sunday, 03 July 2022 14:59
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