Tag Archives: Clause

Fixtures and fittings

A2_bMany transfer attorneys have heard the question from a seller: “May I remove the stove or the curtain rails or the shelves or the … ?”

The most common dispute that arises between a seller and a purchaser is a dispute as to what is regarded as fixtures and fittings. The simple answer is that this would be what the seller and purchaser agreed on in the offer to purchase, as the law leaves it to the seller and purchaser to make their own arrangements.

Usually the offer to purchase only states that the sale is “voetstoots and includes all improvements and all fixtures and fittings of a permanent nature”. It could also be that the offer to purchase does not refer to fixtures and fittings at all. If this is the case there are three factors that have to be considered to determine whether a movable item is a fixture or a fitting.

  1. The nature and the purpose of the item

The item should be of a permanent nature and intended to always serve the immovable property. In other words it must be attached to the land or the structure erected on the land. Examples of this are a carport, steel security gates welded to door frames, and an irrigation system.

  1. The manner and the degree of attachment

The question is whether the item loses its own identity and becomes an integral part of the immovable property or if the attachment is so secure that separation would involve substantial damage to either the immovable property or to the item itself. One must also take into account the method, time and costs involved in removing the item and whether the item could be used elsewhere.

  1. The intention of the owner

One should look at the intention of the owner at the time when the attachment was made.

It is therefore important to address this issue in the offer to purchase and draft a comprehensive list of what is included in the sale. This could save both parties a lot of time and frustration.

The following is a list of items that are usually considered to be permanent fixtures:

Built-in extractor fans; built-in kitchen cupboards; fitted bookshelves; fitted curtain rails; wall mirrors; stoves; existing garden, trees, shrubs, plants; pool filter, pool pump and pool cleaning equipment; fitted carpets; light fittings; towel racks; tap fittings; tennis court net; fireplace; awnings; post box; alarm system; television aerial (but not satellite dishes) and door keys.

Some estate agents have amended their fixtures and fittings clause since the CPA came into operation, to read as follows: “The property is sold with all fixtures and fittings, including the following … which shall be in good working order on date of transfer.” The words “in good working order” are a very subjective assessment and opens the door to debate. The effect hereof is that the seller will be seen to have promised that all the fixtures and fittings will be in good working order, and to a large extent it will be eroding the protection of the voetstoots clause. Sellers should therefore take caution when signing the fixtures and fittings clause.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

What does a suspensive condition in a contract really mean?

A2bMost people that have bought a property may have noticed a clause dealing with suspensive conditions in the contract of sale. Usually these conditions relate to deposits that need to be paid, financing that has to be procured and/or another property that needs to be sold before the sale can be confirmed. The interpretation appears straightforward enough – meet the requirements, and the contract is valid; fail to meet the requirements and the contract is invalid. But is it really that straightforward? And what are the consequences of non-compliance?
In layman’s terms a condition contained in a contract can be described as a provision that defers the obligation(s) of a party in the contract to the occurrence of some future uncertain event. This is usually termed a ‘suspensive condition’ or a ‘condition precedent’.

Legally a suspensive condition can be described as a condition, which suspends the operation or effect of one, or some, or all, of the obligations under a contract until the condition is fulfilled. If the condition is not fulfilled then no contract comes into existence. Once the condition is fulfilled, the contract and the mutual rights of the parties relate back to, and are deemed to have been in force from, the date of the signature of the agreement and not the date of the fulfilment of the condition.

The Supreme Court of Appeal recently confirmed that where a suspensive condition is not fulfilled timeously it lapses and the parties are not bound by it, even though one party has performed fully.

In the matter of Africast (Pty) Limited v Pangbourne Properties Limited the parties concluded a contract for the development of commercial property in an area in Gauteng. One of the suspensive conditions in the contract was that Pangbourne’s board of directors had to approve the contract and written approval had to be presented to Africast within seven working days from the date of conclusion of the contract. The contract was signed on 11 April 2007 and Pangbourne’s board of directors approved the contract on 20 April 2007, however the written approval was only provided on 25 April 2007 to Africast, which was after the required seven-day period. Pangbourne decided after 18 months that since the suspensive condition had not been met within the stipulated period, it was not bound by the contract and refused to deliver the required guarantees. At that stage buildings had already been constructed by Africast in terms of the agreement.

The Court confirmed Pangbourne’s view that since the suspensive condition in the contract had not been fulfilled timeously no contract had come into existence and that the contract had lapsed due to non-fulfilment of the suspensive condition. The Court came to this conclusion notwithstanding the fact that both parties had performed in terms of the agreement for some 18 months.

The most common appearance of suspensive conditions is in contracts involving the sale of immovable property such as a house, flat, plot, or farm. The conditions that are generally encountered in the contract of sale is that the sale is subject to the purchaser obtaining a bond from a financial institution and/or that the sale is subject to the purchaser selling his existing property within a certain period.

It is important to bear in mind that suspensive conditions are usually inserted in a contract for the benefit of one of the parties to the contract. In the abovementioned scenario, the suspensive conditions are included for the protection of the purchaser. Should the purchaser fail to obtain a bond and/or sell his existing property within the required period, the contract would not have any force or effect and the purchaser will not be bound to the terms and conditions of the contract. Non-fulfilment of a suspensive condition renders the contract void and should the parties still wish to continue with the sale, a new contract of sale must be concluded.

If a suspensive condition is included for the benefit of a particular party to a contract, such suspensive condition can be waived at any time prior to the lapsing of the time for the fulfilment of the suspensive condition by the party for whose benefit the condition was included. Having regard to the scenarios mentioned above, the purchaser may accordingly at any time before the lapsing of the period of the suspensive condition, inform the seller that he waives the suspensive condition and the contract is no longer subject thereto. This will then make the contract unconditional and the purchaser and seller will be bound to the terms of the contract.

It is always prudent to tread carefully when entering into a contract that is subject to a suspensive condition. Be aware of the stipulated periods for compliance, for whose benefit the conditions are inserted and the requirements to prove compliance. If necessary, ensure you seek legal advice before you sign the contract and obtain advice before you waive any conditions that have been inserted for your benefit.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice