The Cost of a Handshake: Why Written Agreements Matter

Verbal agreements are recognised and enforceable under South African law, provided that both parties agree on the material terms. The difficulty arises when one party later disputes that any agreement existed at all. Once a dispute reaches litigation, the court is often required to rely on oral evidence to establish what was agreed upon by the parties.

The Johannesburg High Court considered such a matter in Domel v Khumalo and Another [2024] ZAGPJHC 178, involving a rental property with an alleged option to buy.

Background on case

The owner of the property, an elderly lady had entered into a lease agreement with her tenant who agreed to make monthly payments of the rental. During the course of the lease, they verbally agreed to include utilities and consumption charges. The tenant acknowledged these amendments, but in his Responding Affidavit alleged the agreement was made as he understood the lease agreement to now be a rent-to-buy with an option to purchase the property.

Despite this claim, the tenant failed to pay the agreed rental, utilities and other consumption charges. These defaults continued for approximately ten years. He further alleged that he was unable to fulfil his obligations because the landlord had been unreachable for eight of those years. At the same time, he admitted that he had taken no steps to enforce what he believed were his rights under the option to buy agreement.

Court’s Decision

The Court found that the tenant could not accurately prove the existence of an option to buy. He neither honoured his lease agreement nor the rent to buy he believed to have entered verbally thereafter. The Court made it clear that if he intended to enforce rights, he would have exercised all the remedies available to him at law. The Courts concluded by granting the Landlord an eviction order as she had satisfied all the requirements for such as per PIE (Prevention of Illegal Eviction Act).

Lessons from the judgment

This court case highlights the importance of written agreements specifically when dealing with immovable property. Verbal agreements can become costly and difficult to prove when dispute arise years later.

Conclusion

When dealing with property transactions, a written agreement is more than a formality. It records the parties' true intentions, reduces the risk of misunderstanding or disputes later, and provides both parties with legal certainty should a dispute arise in the future.

If you require assistance with drafting or reviewing a sale agreement, contact Snymans Inc. Attorneys. Our experienced property law team will help you conclude your transaction with confidence.

Written by: Deonalin Pongolani
Moderated and approved by: Rohula Kgabu-Mnyayi

‍