Often, buyers want to change their identification, or they have to make changes to make the sale valid. Quite often, the director of a company will:
– want to change the actual Purchaser afterwards to another company of his, and the usual procedure is simply to redraw page 1 of the sale contract and change the Seller’s name to another company.
Changing a contract to validate it occurs when it turns out after concluding the sale that:
– There is more than one owner of the property who has to be added as an additional Seller; or
– The Seller is married in community of property and his spouse has to be added as a co-seller; or
– The Purchaser wants to add another party to the sale or needs to do so to get the bond he requires.
Care is needed here – in the last case, SARS can interpret the addition of another Purchaser as an actual sale from the original buyers of a share to the extra Purchaser, attracting separate transfer duty. It may be a long way around, but it is always safer to draw a new contract rather than making changes to the existing sale agreement.
The key issue here, however, is when the buyer wants to substitute someone else as the Purchaser, usually a different company or a company in place of himself. Here, trouble can arise if deposits have already been paid. Make sure that either you or the conveyancer provides that the deposit paid by the original Purchaser is to be used for the new company’s purchase.
An addendum will be necessary, and it must be signed by both the original and the new Purchaser.
Also, it is better to draw a new contract of sale and declare the first officially cancelled, or double transfer duty may again become payable. What if, after finalising the transfer, the original Purchaser comes along and says, ‘I want my R500.00 deposit back. You had no right to use it for the new Purchaser’?