Understanding the Offer to Purchase (OTP): Key Clauses for Private Sellers

The listing is the advertisement. The Offer to Purchase (OTP) is the actual contract. Once both parties sign it, you are legally bound: there is no changing your mind because a better buyer shows up the next day, and for almost all private sales, there is no cooling-off period.

Looking at a legal contract can feel intimidating. Between statutory definitions, suspensive conditions, and Deeds Office requirements, it is easy to worry that a single mistake will cost you thousands.

Here is the reality: selling privately does not mean handling legal contracts alone. When you transact through deedy, the heavy legal lifting is handled by an admitted, panel-vetted conveyancing attorney who reviews, assists with, and formalizes your OTP before wet-ink signatures are exchanged.

Understanding what is in the document gives you confidence and control. Here is a plain-English guide to each core clause, what it means under South African law, and how the platform protects you at every step.

The Legal Foundation: Writing, Wet Ink, and Spousal Consent

Three statutory requirements determine whether an OTP is valid or completely void under South African law:

• It Must Be in Writing (Alienation of Land Act): Under Section 2 of the Alienation of Land Act 68 of 1981, a sale of immovable property is legally valid only if reduced to writing and signed by both parties (or their authorized legal representatives). Verbal agreements, text messages, and handshake deals have zero legal standing.

• Wet-Ink Signatures Only (No DocuSign): Under Schedule 1 of the Electronic Communications and Transactions Act (ECTA) 25 of 2002, agreements for the alienation of immovable property are explicitly excluded from standard electronic signatures. South African courts and the Deeds Registries require physical, wet-ink signatures on paper. A contract signed via standard digital apps or typed PDF signatures is legally invalid from the outset (void ab initio).

• Marital Status and Spousal Consent (Matrimonial Property Act): If either you or the buyer is married in community of property (COP), Section 15(2) of the Matrimonial Property Act strictly requires the written consent of both spouses to sell or purchase immovable property. While Section 15(9) and Supreme Court of Appeal precedent (Vukeya v Ntshane) protect a seller who genuinely did not know and could not reasonably have known that consent was missing under the "deemed consent" rule, an unauthorized signature still invites protracted litigation and Deeds Office delays.

How you are protected: Your appointed transferring attorney verifies both parties' marital regimes and ensures all necessary spousal consents and wet-ink execution requirements are fully met before lodgement.

1. Parties and Property Description

This sounds simple, but it is one of the most common causes of Deeds Office delays:

• The Parties: Full legal names, South African ID numbers (or foreign passport numbers), and current physical addresses. If either party is a legal entity (Trust, Company, or Close Corporation), the OTP must state the registered entity name, registration number, and include a formal authorizing resolution identifying the signatory.

• The Property: Must match the title deed description verbatim, including the registered erf or sectional scheme unit number, township, and size, not just the residential street address.

*If you sell through deedy, the three foundational elements of the contract are verified and pre-populated before you ever put pen to paper:

• The seller's ownership and title status are confirmed at listing.

• The property description uses institutional Deeds Office data, pulling the exact registered erf or sectional scheme description, cadastral boundary details, and title deed reference directly into the agreement.

• The buyer's identity has already been verified upfront via facial biometrics matched directly against official Department of Home Affairs records.*

You never have to track down Deeds Office records or guess who is sitting on the other side of the contract.

2. Purchase Price, Deposits, and Section 86(4) Interest

The purchase price must be a fixed, unambiguous rand figure, accompanied by clear terms detailing how and when the funds will be delivered:

• Deposit Handling: If a deposit is negotiated, it should never be paid directly to the seller, and never to a marketplace platform. By law, deposits must be paid into the statutory trust account of the conveyancing attorney.

• Interest Accrual: The OTP includes an instruction under Section 86(4) of the Legal Practice Act, directing the conveyancer to invest the deposit in an interest-bearing trust account for the benefit of the buyer pending transfer.

• Bank Guarantees: The contract specifies a strict deadline (typically 14 to 21 days after bond approval or signature) by which the buyer's bank must issue irrevocable payment guarantees to the conveyancer for the balance of the purchase price.

The transferring attorney oversees this entire flow: issuing formal guarantee requirements, securing the deposit in their audited trust account, and confirming receipt of funds before anything proceeds.

3. Suspensive Conditions: The Make-or-Break Clauses

A suspensive condition suspends the operation of the contract until an uncertain future event occurs. Until every suspensive condition is met in writing within the stated timeframe, there is no binding sale.

• Mortgage Bond Approval: The buyer offers to purchase subject to securing bank home loan approval, typically within 14 to 30 days. The clause clearly states whether an approval in principle (AIP) or a formal quotation constitutes fulfillment.

• Sale of the Buyer's Existing Home: If the buyer must sell their current home to fund yours, this condition ties your property to their transaction chain. It must specify a realistic deadline and a minimum acceptable net selling price.

4. The 72-Hour Clause (Continued Marketing)

If you accept an offer that includes a suspensive condition (such as bond approval or the sale of another property), your OTP should include a 72-hour clause (also known as a continued marketing or ratchet clause).

• How It Works: It gives you the legal right to continue marketing the property after accepting a conditional offer. If a competing, unconditional offer (or one with better terms) comes in, you can give your first buyer written notice giving them 72 hours (excluding weekends and South African public holidays) to either waive their suspensive conditions or produce unconditional proof of funds.

• The Outcome: If they fail to do so within 72 hours, the first contract lapses automatically, leaving you free to sign the new, superior offer.

• The Legal Limitation: This clause can only be invoked before the first buyer's conditions are fulfilled. Once their bond is formally granted by the bank, the sale becomes unconditional and the 72-hour clause falls away.

Your appointed conveyancer drafts and serves this formal 72-hour notice for you, ensuring every statutory timeline is legally airtight.

5. Occupation Date, Occupational Rent, and Risk

Transfer of ownership at the Deeds Office and physical occupation rarely happen on the same calendar day. The OTP separates these two milestones cleanly:

Occupational Rent: If the buyer moves in before transfer registers (or if you remain in the property after transfer), the occupying party owes the other occupational rent. This reflects a market-related monthly rental and is stated as a fixed daily or monthly rand amount in the OTP.

Passing of Risk and Benefit: Under common law, risk passes on signature. A properly drafted OTP explicitly amends this, stating that risk passes on registration of transfer or date of occupation (whichever comes first). As the seller, you keep your comprehensive building insurance policy active until the day transfer is formally registered.

Pro-Rata Municipal and Levy Adjustments: The conveyancer performs the exact pro-rata financial reconciliation of municipal rates, water, electricity, and body corporate or HOA levies as of the date of transfer.

6. Fixtures, Fittings, and the "Solar Clause"

Under South African common law, anything permanently attached to the land or building by nature of its physical annexation becomes part of the immovable property (fixtures) and remains with the home. Everything else is movable (fittings) and may be removed.

• Standard Presumptions: Built-in cupboards, mounted curtain rails, fitted stoves, air conditioning units, and pool pumps are considered fixtures.

• The Solar, Inverter, and Battery Battleground: Roof-mounted solar panels are generally considered permanent fixtures, but inverters and lithium-ion battery packs are frequently treated as removable backup appliances by sellers. The OTP makes this explicit: the contract details whether the inverter, battery storage, and solar accessories are included, and notes that the system must be certified under the Electrical Certificate of Compliance.

• Exclusions Schedule: If you are removing a specific heirloom chandelier, a wall-mounted mirror, or an ornamental garden plant, your conveyancer ensures it is explicitly listed as an exclusion in the final agreement.

7. Voetstoets and the Mandatory Property Disclosure Form

The OTP contains a voetstoets ("as is") clause. Under the Property Practitioners Act (PPA), voetstoets protects you against defects you genuinely did not know about, but never against defects you deliberately concealed:

• Patent vs. Latent Defects: Patent defects are visible on reasonable inspection (cracked windows, damaged tiles). Latent defects are hidden flaws not readily visible to the naked eye (foundation movement, structural leaks, internal pipe corrosion).

• The Condition Report: A comprehensive, itemized property condition disclosure document signed by the seller must be attached to the OTP as a formal annexure.

When listing on deedy, your itemized condition report is completed upfront alongside photo documentation at listing creation, ensuring full statutory compliance before any offer is drafted.

8. Conveyancer Appointment and Breach Mechanisms

• Who Appoints the Conveyancer: Under established South African legal practice, the seller possesses the exclusive legal right to appoint the conveyancing attorney, even though the buyer pays the conveyancing transfer fees.

• Breach Clause: If either party fails to meet their obligations, such as failing to supply guarantees or missing contractual deadlines, the innocent party gives written notice (typically 7 to 14 days) demanding rectification. If the defaulting party fails to remedy the breach within that window, the innocent party has the statutory right to cancel the agreement, retain deposits as liquidated damages, or sue for specific performance and damages.

The One Statutory Exception: Cooling-Off Rights

For virtually all residential sales, once both parties sign the OTP, the contract is immediately binding.

The single statutory exception sits under Section 29A of the Alienation of Land Act: a buyer has an unconditional right to revoke their offer within 5 business days of signature, but only if the purchase price is R250,000 or less and the buyer is a natural person (not a trust or company). For almost every modern residential transaction, this exemption does not apply.

You Don't Have to Be a Lawyer to Sell Privately

The paperwork may sound detailed, but you do not navigate it in the dark.

When you accept an offer on deedy, your appointed transferring attorney steps in to guide the process. They verify the contract details, handle the deposit in their Section 86 trust account, manage suspensive conditions, and guide both parties through wet-ink signing.

You keep complete control over your sale and protect your hard-earned equity with an admitted legal professional managing the transfer every step of the way.