SA Property Cooling-Off Period: Know Your Rights

Purchasing property is a significant decision, often accompanied by a mix of excitement and anxiety. To protect buyers, especially those in the lower-income bracket, South African law provides a cooling-off period under Section 29A (1) of the Alienation of Land Act 68 of 1981. This provision allows buyers to reconsider their decision and, if necessary, revoke their offer without facing penalties.

What is the Cooling-Off Period?

¹ The cooling-off period is a five-day window during which a purchaser can cancel their offer to purchase property. This period begins after the purchaser, or their authorised agent signs the offer to purchase or the deed of alienation. The purpose of this provision is to offer a safeguard for buyers who may have rushed into a decision without fully considering the implications.

Key Provisions of Section 29A (1)

1. Duration: The cooling-off period lasts for five days, excluding the day the offer was signed, as well as any Saturdays, Sundays, or public holidays ².

2. Written Notice: To revoke the offer, the purchaser must provide written notice to the seller or their agent. This notice must be signed by the purchaser or their authorised agent, identify the offer being revoked, and be unconditional ³.

3. Refunds: If the offer is revoked within the cooling-off period, any payments made by the purchaser must be refunded in full within ten days of the notice being delivered ⁴.

Limitations and Exceptions ⁵

While the cooling-off period offers significant protection, it is subject to certain limitations:

1. Purchase Price: The cooling-off period only applies if the purchase price of the property does not exceed R250,000 or such higher amount which the Minister may prescribe.

2. Exclusions: The right to revoke does not apply if the purchaser is a trust or a legal entity other than a natural person, if the property was purchased at a publicly advertised auction, or if the purchaser has previously entered into a similar agreement for the same property, the purchaser has reserved the right to nominate another person to take over the rights and obligations of the purchaser and if the purchaser is purchasing the land by way of exercising an option which was open.

In conclusion

The cooling-off period under Section 29A (1) of the Alienation of Land Act is a vital provision that protects property buyers in South Africa. By understanding and utilising this right, buyers can ensure they are making the best decision for their circumstances.

Written by: Nqobile Magwaza
Moderated and approved by: Jean-Mari De Beer – Le Grange

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Footnotes:

¹ Alienation of land act 103 of 1998 s 29A ss (1)

² Alienation of land act 103 of 1998 s 29A ss (2)

³ Alienation of land act 103 of 1998 s 29A ss (3)

⁴ Alienation of land act 103 of 1998 s 29A ss (4) and ss (6)

⁵ Alienation of land act 103 of 1998 s 29A ss (5)

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