Like most other contracts, the contract in terms of the Alienation of Land Act, Act 68 of 1981, never provided for a 'cooling-off period'. As of 27 November 1998, section 29A was included in the Act by the Alienation of Land Amendment Act No 103 of 1998.
Section 29A which was included in the Act has now instituted such a right in certain instances when concluding a contract of alienation of land. Section 29A(5) of the Act states in which instances this cooling-off period won't apply, which include:-
- Purchase price exceeds R250 000;
- Purchaser is a trust or a person other than a natural person;
- Purchaser or his agent purchased the land at a Publicly Advertised Auction;
- A previous deed of alienation of the same land and on substantially the same terms were entered into by the seller and the purchaser;
- Purchaser or prospective purchaser has reserved the right in terms of the deed of alienation or offer to nominate or appoint another person to take over the rights and obligations of the purchaser as stipulated in the offer of deed of alienation;
- Purchaser purchases the land by the exercise of an option which was open for the exercise for a period of at least five days, calculated with exclusion of any Saturday, Sunday, Public Holiday as well as the day upon which the offer was made.
The proviso of this section is that the transaction amount of the property must not exceed R250 000. If the cooling-off period is to apply such right to termination of the sale agreement must be disclosed to the buyer in the sale agreement (contract of sale) itself.
Even though the Act makes no provision for the instance where the cooling-off period was not disclosed in the contract itself, a recent court ruling in Sayers v Kahn (2002) 1 ALL SA 557 (C) has now clarified this by determining that a sale agreement is void (if there is no disclosure there can be no sale) if the buyer does not enjoy a cooling-off right but this was not included as a clause in the deed of sale.
It is important to be aware of this provision, as the investment that you make when purchasing a property will most probably constitute the biggest investment you will make in your life.
Republished with permission