Sale and Lease

Question 1

Draw a clause in deed of sale re agents commission. Acting for the seller, purchaser approached the seller directly seeing the house was vacant. Purchaser warrants that he approached the seller directly without being aware of estate agents

Answer 1

1. The purchaser confirms that his contract was entered into without the purchaser having been introduced to the seller directly by any estate agent or that any estate agent was the effective cause of the conclusion of this contract of sale.
2. As a result of the sale by the seller to the purchaser on these grounds, the purchase price has been reduced by an amount equal to the expected agent’s commission.
3. The purchaser consequently indemnifies the seller against any legitimate claim which may be brought against the seller for agents commission arising from this sale. The seller shall call upon the purchaser to assist the seller in any actual or threatening litigation arising from any claim for commission and shall put the seller in funds to do so. The seller shall however be free to decide on the best manner of settlement of any such action. Any costs or charged including legal fees on all scales and any capital sum payable shall be recoverable from the purchaser as liquidated damages.

Question 2

Draw a clause in sale of business suspending agreement until arrangements made with landlord of the premises, allowing for cession and delegation of rights and obligations in terms of existing lease from tenant to purchaser and conclusion of a new lease agreement with cancellation of a previous.

Answer 2

Suspensive Condition

1. This agreement shall be of no force or effect unless, within 30 days reckoned from the effective date or any extension of such date by mutual agreement in writing,
   i) The sellers rights and obligations in terms of the existing lease agreement concluded between the Landlord as Lessor and the Seller as tenant in regards to the premises are ceded and assigned from the seller to the purchaser with effect from the effective date with the consent of the landlord;

ii) The existing lease agreement between the landlord and the seller is cancelled and a new lease agreement is concluded between the purchaser and the landlord on terms mutually acceptable to them.

Question 3

List all the important clauses to include in the sale of a business as a going concern

Answer 3

1. Business must be a going concern and VAT implication must be appreciated
2. Sale and Purchase
3. Purchase Price
4. Payment of Purchase Price
5. Suspensive Conditions
6. Stocktaking
7. Assets and Liabilities
8. Delivery of Assets
9. Adjustment of accounts
10. Effective Date
11. Warranties
12. Voetstoots
13. Employees and Pension Fund
14. Publication in terms of Insolvency Act
15. Restraint
16. Breach
17. Domicilia and Notices
18. Whole agreement waiver
19. Jurisdiction
20. Dispute Resolution
21. Agents Commission
22. Costs

Question 4

What requirements must be complied with for cancellation of lease and ejectment?

Answer 4

• actions for ejectment from residential premises subject to PIE act
• Owner must give written and effective notice of the proceedings to the occupier and the municipality 14 days before hearing
• The act creates a delay in owners rights until a finding whether it is just and equitable to evict
• the court has discretion