Real Estate Transactions Quiz

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Questions and Answers

What must the buyer pay if they occupy the property before registration?

Occupational rent (correct)

Maintenance costs

VAT

Transfer duty

In a sale of immovable property, who is responsible for paying VAT?

The government

Both the buyer and the seller equally

The buyer

The seller (correct)

What right allows someone to purchase property before it is sold to another party?

Pre-emptive right (correct)

Option to purchase

Exclusive offer

Right of first sale

What must happen for the pre-emptive right to come into effect?

The owner must decide to sell the property Signup and view all the answers

What happens if the buyer fails to collect the object?

The seller can claim necessary expenses incurred for protection Signup and view all the answers

What is an option in the context of property contracts?

A contract that keeps an offer open for acceptance within a specified period Signup and view all the answers

What must the buyer deliver to the seller regarding benefits accrued before the contract became effective?

All benefits accrued, unless otherwise agreed Signup and view all the answers

Which of the following statements about the option is true?

The option cannot be offered to other parties during the specified period. Signup and view all the answers

What happens if the option contract is exercised?

A second contract is created that must adhere to its terms. Signup and view all the answers

Which statement about pre-emptive rights and options is true?

No formalities are needed unless specified by law or agreement. Signup and view all the answers

What is required for a valid sale of immovables under the Alienation of Land Act?

A signed written contract. Signup and view all the answers

Under which section of the Consumer Protection Act do consumers have remedies like return, replace, or refund?

Section 56 Signup and view all the answers

What can C do if a defect in the printer is discovered after purchase under the applicable Consumer Protection Act?

Seek a refund, replacement, or return. Signup and view all the answers

If Monya sold her house with a known defect, what legal implications may arise?

She could be liable for misrepresentation if not disclosed. Signup and view all the answers

What is a consequence of not exercising the option contract?

The option contract and associated offer to sell are terminated. Signup and view all the answers

What distinguishes the formalities of option contracts in relation to main contracts?

Option contracts do not require compliance with formalities of main contracts. Signup and view all the answers

What section of the CPA does not provide a blanket exclusion of Monya's liability?

Section 55(6) Signup and view all the answers

What must the house comply with according to the CPA?

Standards of quality in terms of section 55 Signup and view all the answers

What is the timeframe within which Refilwe can institute remedies against Monya for breach of quality standards?

6 months Signup and view all the answers

What remedies can Refilwe rely on if the house does not comply with quality standards?

Common law remedies or CPA remedies Signup and view all the answers

What was the primary issue with the house that Monya failed to disclose properly?

Leaky roof due to ineffective support Signup and view all the answers

What stipulation did Monya include in the deed of sale to reassure Refilwe?

Transfer of a contractor's roof guarantee Signup and view all the answers

What clause in the deed of sale excluded Monya's liability for latent defects?

Voetstoots clause Signup and view all the answers

What was the reason for Refilwe's dissatisfaction after the sale?

The roof continued to leak despite repairs Signup and view all the answers

How many times can the actio quanti minoris be claimed?

More than once Signup and view all the answers

What type of defect is the hairline crack in the engine considered to be?

Latent defect Signup and view all the answers

What can Elsa claim if she returns the Merx?

Monetary compensation for damages and the return of the Merx Signup and view all the answers

Which stipulation surrounds the actio redhibitoria?

It can only be claimed once. Signup and view all the answers

What was the primary consequence Elsa faced after driving the Merx?

She lost control and sustained personal injuries. Signup and view all the answers

What is a key legal principle regarding latent defects?

They make an item unfit for intended use. Signup and view all the answers

What was Busi's main argument in response to Elsa's claims?

Elsa was responsible for the damages. Signup and view all the answers

What type of compensation does Elsa seek from Busi due to her injuries?

For emotional distress and physical damages Signup and view all the answers

Which parties are still subject to Sections 60 and 61 of the CPA for transactions exempt from the Consumer Protection Act in South Africa?

Importer, producer, distributor, and retailer Signup and view all the answers

What is the general rule regarding claims based on the warranty of latent defects when a voetstoots clause is included in a sale?

Claims will not be valid if the defect was excluded in the sale Signup and view all the answers

Under what condition can a seller be held liable for a latent defect despite a voetstoots clause?

If the seller concealed the defect with intent to defraud Signup and view all the answers

How does the test from Waller v Pienaar determine the duty to disclose latent defects?

By considering if the defect was obvious to the buyer Signup and view all the answers

What burden does Busi have if she was aware of the crack before selling the Merx?

A duty to report the crack to the buyer Signup and view all the answers

What assumption can be made if the buyer could not have reasonably discovered the latent defect before the sale?

The seller may have a duty to disclose the defect Signup and view all the answers

Which of the following is NOT a situation where a seller could be liable despite a voetstoots clause?

Seller was unaware of the defect Signup and view all the answers

What was the nature of the advice given to Busi regarding the crack in the Merx?

To repair it before taking any further actions Signup and view all the answers

Study Notes

Seller’s Rights

If the buyer fails to collect the purchased item, the seller can claim expenses incurred for the item’s protection and upkeep.

Buyer’s Responsibilities in Immovable Property Sales

Buyer pays transfer costs and transfer duty.
Buyer pays occupational rent to seller if they occupied the property before registration.
Buyer delivers any benefits accrued to the property before the contract becomes effective to the seller, unless otherwise agreed.

Pre-emptive Right

A pre-emptive right allows the holder to purchase property before the owner sells it.
The holder can either make an offer to the seller first or receive an exclusive offer from the seller.
It only comes into effect when the owner decides to sell; prior to this, the holder can’t make or receive offers.

Option

An option allows the holder the right to accept an offer to buy or sell for a specified time.
During this period, the offer cannot be withdrawn or offered to anyone else.
If exercised, a second contract is created, and the grantor must adhere to its terms.
If not exercised, the option contract and its associated offer terminate.

Formalities for Pre-emptive Rights and Options: Movables

No formalities are required unless explicitly specified by law or agreement.
Option contracts do not need to comply with formalities for the main contract.

Formalities for Pre-emptive Rights and Options: Immovables

The Alienation of Land Act 68 of 1981 requires writing and signature for a valid immovable property sale.
The applicability of these formalities to pre-emptive rights and options for immovables is debated.

Section 56 of the CPA

The Consumer Protection Act provides the following remedies for defective goods within 2 months:
- Return
- Replace
- Refund

Section 55 of the CPA

Goods must comply with standards of quality.
If they don't, the buyer has remedies in Section 56 within 6 months of contract conclusion.

Common Law Remedies

In addition to remedies in Section 56, the buyer may also rely on common law remedies.

Voetstoots Clause

This clause excludes liability for latent defects.

Actio Redhibitoria

Allows the buyer to rescind the contract and return the defective goods.
Can only be claimed once.

Actio Quanti Minoris

Allows the buyer to claim a reduction in the purchase price based on the defect.
Can be claimed multiple times.

Latent Defects

A defect that was not apparent and could not be reasonably discovered by the buyer.
The seller may be held liable for latent defects if they knowingly concealed them.

Duty to Disclose

No general duty to disclose latent defects unless the seller’s actions are fraudulent.
The buyer must prove they could not have reasonably discovered the defect on their own.

CPA Exemptions

Even if a transaction is exempt from the CPA, the importer, producer, distributor, and retailer are still subject to Sections 60 and 61 of the CPA.

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Description

Test your knowledge on seller's rights, buyer's responsibilities, and options in immovable property sales. This quiz covers key concepts such as pre-emptive rights and the obligations of both parties in a property transaction.