If your sale agreement lapses, can you revive the sale agreement?
What is a revival Agreement?
“No alienation of land after the commencement of this section shall, subject to the provisions of Section 28, be of any force or effect unless it is contained in a deed of alienation signed by the parties thereto or by their agents acting on their written authority.” The most important factor when dealing with a revival agreement, is to ensure that the revival agreement complies with the statutory requirements of Section 2(1) of the Alienation of Land Act 61 of 1981 (hereinafter referred to as the Act). As was held in the case of Streicher JA in Fairoaks Investment Holdings (Pty) LTd v Oliver 2008 (4) SA 302 (SCA) paragraph 5, an agreement of sale with amendments to revive a lapsed agreement of sale of an immovable property due to non-fulfilment of a suspensive condition must comply with Section 2 (1) of the Act.
What does this all mean?
What this means is that, should you wish to transfer your assets to a new/existing company but you are concerned about the cost implications being Capital Gains Tax (CGT), VAT, Transfer duty etc. then an Asset for Shares might be just what you are looking for as you will not be liable for any of these taxes if you follow the prescribed requirements.
Recent Court Case
Recently we had a case where the purchaser claimed that a written sale agreement of an immovable property concluded between the seller and purchaser, become null and void with no force and effect due to the nonfulfilment of its suspensive condition. It was also claimed that the written revival agreement did not revive the sale agreement and that there was no existing agreement between the parties. It was held that on proper interpretation of the revival agreement’s provisions, that the revival agreement constitutes a new written agreement for the sale and purchase of the property, which complies with the provisions of Section 2 (1) of the Act, and is valid and enforceable.
Conclusion
A revival agreement reviving the transaction between the parties must contain clear and express terms, with the purpose and effect to conclude a new agreement of sale.
