The Effect of Unforeseen Events in Property Transactions - Discovery of an Interdict on the Property
It goes without saying that there are various unexpected events that can arise at some point within the transfer of property. Unfortunately, a lot of these unexpected events are far beyond our control.
This second article in the series is about the discovery of an interdict and the effect it will have on a sales agreement. In order to explain the issues at hand in more detail, the following 3 topics will be discussed:
1. Explanation of the unforeseen event – i.e. what is an interdict?
2. The effects of the unforeseen event
3. How to ensure that this does not affect your sale
1. WHAT IS AN INTERDICT?
In law it is an official instruction from a Court telling someone that they are not allowed to do something. In this case not to transfer a property without the necessary consent. Examples are: when there is judgement against the Seller for the repaying of debts. This is noted in the Deeds Office and prohibits a Seller to transfer his property until the interdict has been removed.
2. THE EFFECTS OF AN UNFORESEEN EVENT OF HAVING TO REMOVE AN INTERDICT
Depending on the nature of the interdict and whether the creditor or third party is willing to consent to the transfer of the property it may delay a transfer by a month or more. The Seller will also have to pay additional legal costs in order to uplift the interdict as this is a formal process.
3. HOW TO ENSURE THAT AN INTERDICT DOES NOT AFFECT YOUR SALE
The seller will be aware of any attachment order and should be able to tell the estate agent. If an interdict has been attached to the property the agent should ensure that the transferring attorney is aware of this. It is imperative that the agent advises the Seller to protect himself in the Offer to Purchase by inserting a suspensive condition stating that: “The contract is subject to the condition that the relevant creditor/third party, consents to the transaction.” Thus, the seller will be protected and cannot be placed in breach of contract if the creditor/third party does not consent.