controversy concerning the cooling-off right
Posted 14 July 2006
Section 2(2A) of the Alienation of Land Act 68 of 1981 provides that a deed of alienation of land 'shall contain the right of a purchaser or prospective purchaser to revoke the offer or terminate the deed of alienation in terms of s 29A'. Section 29A empowers certain purchasers of immovable property to revoke an offer to purchase or terminate a sale agreement within a five-day period. The consequences of a failure to comply with the provisions of s 2(2A) are not expressly stipulated in the Act.
In the case Sayers v Khan 2002 (5) SA 688 (C), the Court concluded that the Legislature intended to render null and void a deed of alienation that failed to comply with s 2(2A). However, the correctness of that judgment has now been challenged in Section Three Dolphin Coast Medical Centre CC and Another v Cowar Investments (Pty) Ltd 2006 (2) SA 15 (D). The Court ruled that the Sayers case had been wrongly decided and that non-compliance with s 2(2A) does not render the sale void: it is merely voidable at the instance of the buyer, being the person for whose benefit the provision was enacted.
Also see the commentary in Bulletin Vol 23.6, April 2006