My Million-Dollar Friend is Selling his house. I have the financial means to purchase the property by making lump sum monthly/bi-monthly payments over a period of time. I do not want to obtain finance via the traditional bank route, as I am Self-Employed and the banks red tape to obtain same, is the equivalent of a kidney transplant. Do I have other options?
YES, Welcome to Section 20 of Alienation of Deeds Act, Instalment sale agreement, a smart, flexible way to acquire immovable property.
What is a Section 20 Instalment sale agreement?
An instalment sale is a contract between the seller and buyer where the buyer pays for the property over a period of time by way of instalments. Unlike a traditional sale, the Purchaser does not obtain full ownership right away- but can take possession of the property in the interim and the Section 20 agreement is recorded in the deeds office, preventing the Seller form selling the property it to a third person.
Once you’ve paid the final instalment, the ownership is transferred to you.
An instalment sale agreement enables buyers to acquire property without the need for a full down payment or a traditional mortgage, while allowing sellers to defer receipt of the full purchase price. It offers a flexible alternative for sellers and buyers.
Legal Safeguards for both seller and purchaser
Historically, instalment sales carried risks for buyers because sellers retain ownership until full payment is made.
If the buyer defaults on payments, the seller cannot immediately cancel the agreement or accelerate payment demands. Instead, the seller must issue a written notice of breach, giving the buyer a reasonable opportunity to fix the default. Only if the buyer fails to comply after this period can the seller can cancel the agreement or take further alternative legal action.
How can we help?
We can guide you through the instalment sale process – from negotiating terms to drafting a watertight agreement – so you can buy your property with confidence and peace of mind.
