An Offer to Purchase (OTP) is a legally binding agreement, in the event of either party defaulting, there are consequences. While most sales proceed smoothly, a buyer or seller may fail to meet their obligations, which can lead to delays, financial loss, and even litigation.
When a buyer defaults, the most common reason is failure to pay a deposit, pay their costs or the balance of purchase price. In such cases, the seller can in line with the agreement send the buyer a letter requiring the buyer to remedy the breach within a specified period. If the buyer still fails to comply, the seller may cancel the agreement and even pursue a damages claim. In certain situations, the seller may also approach the court for specific performance, and obtain a court order, ordering the buyers to perform in terms of the agreement. If the buyer then fails to do so, he/she will be in contempt of a court order.
Seller defaults can be just as disruptive. Common issues include failing to provide the title deed, delaying the transfer by refusing to sign the necessary documents, fails to pay the rates and taxes to obtain a rates clearance certificate. If the Seller is in breach, the buyer can similarly send a letter to the seller requiring the Seller to remedy the breach. If the Seller does not correct the issue within the set timeframe, the buyer may cancel the agreement and claim a full refund of the deposit. The buyer may also pursue damages or request specific performance.
In both scenarios, timing is crucial. If a default is not addressed promptly, the affected party may lose the opportunity to resell or may suffer unnecessary financial loss. That is why professional legal guidance is essential to ensure that the correct steps are followed and your rights are protected.
If you have entered into a offer to purchase and a party is in breach, and it feels like there the process is going nowhere, our firm can assist. We would first attempt to mediate and have the parties settle/agree the way forward. As much as we love a good fight, our firms core value is to act in the client’s best interest and provide practical advice. It’s not always about who is right or wrong, as even being right, can be a VERY expensive exercise in the legal world of litigation.
Mediation is also a highly effective avenue for resolving these disputes quickly and cost effectively, often preserving relationships and avoiding lengthy court proceedings.
Contact us today for assistance.
