We chatted to Karien Hunter, founder and director of AMC Hunter, about the importance of a proper contract when purchasing property.
Living and investing on the stunning North Coast of KZN is a dream come true, but behind every beautiful holiday home or thriving business lies a crucial truth: contracts are forever. Whether buying a home for leisure or a business to grow, entering into a contract is a serious legal commitment that can affect your financial future.
With 40 years of practising law and specialising in contracts, Karien has seen first-hand the difference a well-drafted and properly vetted contract can make. Clients who invest wisely, backed by strong contracts reviewed by a lawyer or contract specialist, protect their interests and invest with confidence. Sadly, many others end up in costly litigation because their contracts were unclear or poorly worded.
The 4 Ws to guide your contract decisions
Why are you buying?
Ensure your reasons are clear. Impulsive decisions can lead to regrets and legal obligations you cannot avoid.
What are you buying?
Know exactly what you’re getting. For homes or businesses, inspect thoroughly and conduct due diligence. A proper contract with a due diligence period allows you to verify critical details and financial information before committing. Also, when buying a business, consider whether you are purchasing the business itself or the shares of the company that owns it. Each scenario carries different tax consequences and risk factors.
Who owns it?
Ensure you are dealing with the actual owner when purchasing a property or with the authorised representative of a business. A simple deeds or company search should confirm this and help ensure the contracting parties are correct. For example, are there multiple directors in a business, or is a property registered in both the husband’s and wife’s names (i.e. consider marital status)?
When do you want to buy?
Use contract terms to safeguard timing, including conditions and contingencies, payment terms, and the passing of risk, to name a few.
If the purchase is subject to finance, give yourself enough time to secure it and make sure the transaction is conditional on obtaining such finance.
Why engage a lawyer or contract specialist?
Investing in property or buying a business is often your biggest financial commitment. Having your contract reviewed and drafted by a professional is a small cost compared to the financial and emotional toll of litigation over poorly worded terms or misunderstandings. Proper legal advice ensures your contract reflects your interests and protects you from future disputes.
In short: getting your contract right from the start means you can truly enjoy your North Coast lifestyle with peace of mind.
Common contract mistakes to avoid
• Many buyers assume a standard or “template” contract will cover all scenarios, but generic documents often leave out crucial clauses related to defects, access, zoning and timelines.
• Verbal promises from agents or sellers mean little without written confirmation. If it isn’t in the contract, it’s unlikely to be enforceable.
• Rushing the process can lead to overlooked details such as transfer dates, occupation terms or conditions that protect you if something changes.
• Buyers often fail to investigate whether a property or business carries hidden liabilities, or unresolved disputes.
• Misunderstanding the difference between buying a business versus buying the shares of a company can lead to unexpected tax and legal consequences down the line.
Details: www.amchunter.co.za; 0834492969
