What protection does a buyer have in an Instalment sale agreement?

Transfer of ownership of the goods to the Customer only upon fulfilment of the Agreement; Typical Instalment Sale Agreements will contain a clause reserving ownership until the final instalment is paid. This serves as security for payment of the purchase price.

What is an installment contract for sale of real estate?

In an installment sale contract — sometimes called a contract for deed — generally the owner agrees to sell the real estate to the buyer for periodic payments to be applied to the purchase price in some fashion. The buyer usually receives possession of the real estate during the term of the contract.

What is an ala agreement?

The Alienation of Land Act (ALA) enables a buyer to acquire a property by paying the seller in more than two instalments (in usual bank-financed transactions there are two instalments: the deposit and the final settlement amount) and over a period longer than one year, but not longer than five years.

What is a Section 20 endorsement?

• Section 20(1) of the Act deals with the recordal of instalment sale agreements (specifically referred to as „contracts‟ in the Act) and provides in subsection (1)(a) that a seller, whether he is the owner of the land concerned or not, shall cause the contract to be recorded by the relevant Registrar of Deeds.

What is an installment sale agreement in South Africa?

See our Privacy Policy. A person wishing to purchase a property in South Africa may conclude what is known as an “Installment Sale Agreement” (Instalment Sale Agreement) in terms of which the purchase price is paid in installments.

What do you need to know about instalment sales agreement?

Introduction. Under this economic climate in South Africa, many consumers opt to conclude Instalment Sale Agreements as a plausible way of purchasing goods or property. In terms of an Instalment Sale Agreement, ownership is reserved and payment is deferred and deferral must take place in that the Customer must pay the purchase price in instalments.

What are the requirements for an installment sale?

In order to conclude an Installment Sale Agreement the property which is to be sold must be residential property which then obviously excludes commercial, agricultural, industrial and other properties. In addition the purchase price must be paid by way of two or more instalments over a period of at least twelve months.

Do you need a deposit for an instalment agreement?

No deposit required, unless parties agree that a deposit needs to be paid. The purchaser can utilise the term of instalment agreement to rectify any adverse credit record issues and to accumulate his/her deposit. The purchaser can sell the property at any time during the course of the ALA agreement.