The Deposit On Purchase Agreement is a crucial document in South African property transactions, used when a purchaser commits to buying property by paying an initial deposit. This agreement serves as a legally binding document that protects both the purchaser's and seller's interests during the property transaction process. It details the deposit amount, payment terms, and conditions for holding and releasing the funds, while ensuring compliance with South African property law, including the Alienation of Land Act and relevant consumer protection legislation. The agreement is particularly important in establishing clear terms for the deposit's management, interest accrual, and the circumstances under which it may be refunded or forfeited, providing security and clarity for all parties involved in the transaction.
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1. Parties: Identifies and provides full details of the purchaser and seller, including registration/ID numbers and contact details
2. Background: Contextualizes the agreement, stating the seller's ownership of the property and purchaser's intention to buy
3. Definitions: Defines key terms used throughout the agreement for clarity and legal certainty
4. Property Description: Detailed description of the property including erf number, physical address, and size
5. Purchase Price: States the total purchase price and payment terms
6. Deposit Terms: Specifies the deposit amount, payment deadline, and holding terms
7. Payment Terms: Details the method and timing of payment for the balance of the purchase price
8. Trust Account Details: Specifies the trust account details where the deposit will be held
9. Interest on Deposit: Addresses the treatment of any interest earned on the deposit
10. Conditions Precedent: Lists any conditions that must be met before the agreement becomes fully effective
11. Risk and Possession: Specifies when risk and possession of the property transfers to the purchaser
12. Breach and Remedies: Outlines consequences of breach and available remedies
13. Governing Law: Confirms South African law governs the agreement
14. Notices and Domicilia: Specifies how and where official notices must be delivered
15. General Terms: Standard contract terms including entire agreement, variation, and severability clauses
1. Bond Clause: Required when purchase is subject to the purchaser obtaining mortgage finance
2. Sale of Purchaser's Property: Include when purchase is conditional on the purchaser selling their existing property
3. Occupational Rent: Required when early occupation is permitted before transfer
4. Agent Commission: Include when an estate agent is involved in the transaction
5. Property Condition: Detailed clause about property condition when selling voetstoots or with specific warranties
6. VAT Provisions: Required when the seller is VAT registered and the sale attracts VAT
7. FICA Requirements: Detailed requirements for FICA compliance when relevant
1. Property Details Schedule: Detailed description of property including fixtures and fittings
2. Payment Schedule: Breakdown of payment terms including deposit and balance payment timeline
3. Defects List: List of known defects in the property acknowledged by both parties
4. Property Plans: Approved building plans and property diagrams
5. Compliance Certificates: List of required compliance certificates and their status
6. Special Conditions: Any special conditions agreed between the parties
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