ORAL AGREEMENT: OPTION TO PURCHASE VS PRE-EMPTIVE RIGHT
Kretzmann v Kretzmann and Another (2644/2018) [2019] ZAECPEHC 54 (27 August 2019)
In 2017 the Constitutional Court declared that a pre-emptive right to purchase property need not be reduced to writing in order to be valid. This was because a right of pre-emption gives the holder thereof no right to claim transfer of land; it merely gives him a right to enter into an agreement of sale with the grantor, should the latter wish to sell. When such an agreement is completed then – and not before – will he have a right to claim transfer of land, and that it is the agreement which must be in writing. Could the same be said of an option to purchase? The Judgment can be viewed here.
The Judgment
Summary of the Judgment
TRANSFER ANNULLED AS SELLER WAS NOT INFORMED OF PURCHASER’S CORRECT IDENTITY
Uniting Presbyterian Church in SA and Another v Reformed Presbyterian Church in Southern Africa and Others (1438/2018) [2019] ZASCA 129 (30 September 2019)
A church breakaway group bought a property from the City of Cape Town at a time when the latter was led to believe that the purchaser belonged to an existing congregation. The Court here annulled the agreement of sale as well as the subsequent transfer, holding that the conduct of the purchaser caused a material mistake (error in persona) and rendered the sale agreement null and void. The judgment is a valuable read, especially for illustrating that apart from an ostensibly valid sale agreement, there was no ‘real agreement’ or consensus to pass transfer and that this resulted in annulling registration of transfer.
