Can a buyer delay transfer of a home on a minor technicality without being penalised?

02 July 2014

Buyers of homes in most cases would want the transfer to go through as soon as possible, but in some isolated incidents there are some people, who for various reasons use delaying tactics to delay the transfer process, but what they must realise is that they could be liable for the interest which should have accrued to the seller during that time, says Lanice Steward, managing director of Knight Frank Residential SA.

Reasons for delays could be the buyer complaining about a faulty garden gate, to the buyers saying that the conveyancer’s details were not included for them to submit guarantees for payment (as in a case mentioned recently in a Smith Tabata Buchanan Boyes property law update, Mmakola v Nel).

In the Mmakola v Nel case the Mmakola’s, after delivering the first guarantee for part payment on the property they had purchased from Nel five months later than it was meant to be presented and then the second guarantee a month later, delayed the transfer by some five months. Nel instituted action against them claiming the interest for the months June to August of that year.

According to their sale agreement the Mmakolas were liable for interest at the rate of 15% per annum and courts held in Nel’s favour, stating that the omission of the conveyancer’s details was a minor technicality and that this did not excuse them from not providing the guarantees in time, as they could have gotten these details from the seller (and in fact did have correspondence later from him with his details on the letter).

Steward said that a case Knight Frank have dealt with in particular was a faulty gate, which was in full working order when the sale took place but had subsequently broken. The sellers in this case have no working capital to repair it, so the situation is at a stalemate. This is not a huge item, she said, but it could result in the transfer being delayed if the buyer decides he wants it repaired before the transfer can go ahead.

If the case law from the above mentioned situation is applied, however, he could be liable for the interest due to the seller for the period the transfer was delayed, she said.