A sale agreement is a legally binding document that clearly outlines the terms and conditions for the sale of a property between two parties. It is used to protect the interests of both the purchase and the vendor.
It constitutes the terms and conditions of sale of a property by the seller to the buyer. These terms and conditions include the amount at which it is to be sold and the future date of full payment. Being an important document in the sale transaction, it enables the process of sale to go through without any hurdles.
All the terms and conditions included in the agreement of sale must be understood thoroughly by both the parties and obeyed throughout the sale process till the time the sale deed is made. Agreement of sale is the base document on which the sale deed is drafted.
Buying land properly involves taking a number of processes, key among them is ensuring you the purchase do proper due diligence. In most cases, this will involve such things as going for the physical site visit, doing a land search and a company search if buying from a registered company.
Once you are done with the due diligence, you will proceed to negotiate on the price and other terms of the purchase thus forming a contract that can be enforced by the law, that is where a sale agreement comes in.
A sale agreement in relation to land is a contract for the sale of land. It is the document prepared at the time of full payment made by the buyer and preceeds the actual transfer of the property. The contract is drawn by the vendor’s advocate who must confirm the vendor’s capacity to sell.
The particulars of sale describes the particulars of the land as well as the nature of estate being sold (i.e. freehold or leasehold). A mis-description may entitle the buyer to rescind the contract and seek a refund of the deposit purchase sum paid.
If any chattels are to be included in the sale, it is good practice to have a separate list of the same which can be attached to the final form of contract as an annexture.
The particulars of sale must state distinctly or by necessary implication that which is the subject matter of the contract. The property must never be described inaccurately. In Kenya the interest sold will either be freehold or leasehold.
The agreement acts to protect both of the purchaser and seller’s interests and to ensure that both get what they rightfully deserve without getting duped. The sales agreement fully protects the rights and interests of the buyer and the seller because if one party fails to adhere to the contract the other party can take legal action to recover the damages caused.
The sales agreement is filled in triplicate one for the vendor, one for the purchaser, one for the lawyer/ legal advisor overseeing the transaction.
Having a sale agreement also conforms to The Law of Contract that provides for written agreements in disposition of land hence it ensures legal compliance and validity to bind the parties.
It ensures enforceability in the event of fraud, default in payment, breach of terms among other reasons for failure of an agreement. Without having a written sale agreement it would be difficult to prove to the court that an agreement regarding the sale of land existed or took place.
A land sale agreement should include but not limited to:
A sale agreement unlike any other contract must provide the following to be valid:
Completion documents must be included in the completion clause of the sale agreement and it includes the following: