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An Offer to Purchase (OTP) is a formal step in the buying or selling process but it’s also a binding agreement that sets out the terms and conditions of a property sale. Once signed by both buyer and seller, it becomes legally enforceable and provides the framework for how the transaction will proceed.

A well-drafted OTP protects the interests of both parties, ensures clarity on the key aspects of the deal, and reduces the risk of disputes or delays. If the clauses are incomplete, unclear, or misunderstood, they can cause financial losses, unnecessary conflict, or even the collapse of the sale.

Below we look at 10 clauses that every buyer and seller should understand, explaining their purpose, what they typically include, and why they matter.

1. Purchase Price and Payment Terms

This clause confirms the agreed purchase price and exactly how it will be paid. For smooth transfers, it needs to be specific and complete. It should cover:

• Deposit details – the amount, when it must be paid, and where it will be held (typically in an interest-bearing trust account managed by the appointed legal representative). It should also state who benefits from the interest earned.
• Balance of the purchase price – whether this will be paid in cash, through a bond, or a combination of the two.
• Proof of funds – for cash transactions, the seller may request written proof that the funds are available.
• Payment timeframes – clear deadlines for each stage of payment to avoid unnecessary delays.

Inaccuracies or vague terms here can easily derail a transaction, especially in sales where finance or multiple funding sources are involved.

2. Suspensive Conditions

Suspensive conditions are safeguards built into the OTP — the sale will only go ahead if certain conditions are met within the agreed period. If they are not, the agreement automatically lapses without penalties.

Common examples include:

• Bond approval – the buyer must secure a home loan within a set number of days (often 21–30). If they cannot, the agreement is cancelled and any deposit is refunded.
• Sale of another property – the buyer may need to sell an existing home before they can proceed with the purchase. This clause should specify what counts as a valid sale and by when it must happen.

Other suspensive conditions can include obtaining required certificates, municipal approvals, or zoning changes. Clear timelines are essential to prevent uncertainty or disputes later.

3. Occupation Date and Occupational Rent

The occupation date is when the buyer gets the right to physically move into the property. This can happen before or after ownership is officially transferred.

If the buyer moves in before transfer or the seller stays after transfer, occupational rent applies. The OTP should spell out:

• The amount payable — usually calculated in line with the property’s market rental value.
• When and how it should be paid.
• Which party is responsible for rates, utilities, insurance, and upkeep during this period.

Agreeing on these details upfront avoids misunderstandings and ensures both parties are compensated fairly for early or extended occupation.

4. Voetstoots Clause

The voetstoots clause means the buyer agrees to purchase the property “as is,” including any visible or hidden defects.

However, this does not allow a seller to conceal known defects. If the seller fails to disclose an issue they were aware of — such as a leaking roof or structural crack — they can still be held responsible.

Buyers should inspect the property thoroughly before signing the OTP, preferably with a professional inspector. Sellers should make full, honest disclosures to avoid disputes after transfer.

5. Fixtures and Fittings

This clause lists what stays with the property after the sale and what the seller can take.

• Fixtures are items permanently attached, such as built-in cupboards, bathroom fittings, or hard-wired lighting.
• Fittings are movable but can be included if agreed upon — for example, appliances, custom blinds, or outdoor furniture.

Everything included or excluded should be clearly listed in writing. For higher-value properties, attaching a photographic inventory can prevent disputes.

6. Transfer and Legal Costs

The OTP should make it clear who is responsible for the costs of transferring ownership. These often include:

• Transfer duty – a tax payable to SARS by the buyer if the purchase price exceeds the threshold.
• Professional fees – payable to the appointed attorneys handling the transfer.
• Deeds Office fees – payable when lodging the transfer for registration.

Most of these costs fall to the buyer, but payment deadlines must be met to avoid delays in the registration process.

7. Breach of Contract

This clause explains what happens if one party fails to meet their obligations. It typically sets out:

• The process for giving written notice of breach.
• The time allowed (often 7–14 days) to correct the breach.
• The right to cancel the OTP and claim damages if the breach is not resolved.

A clear breach clause ensures that problems can be dealt with quickly and fairly without derailing the entire transaction.

8. Agent’s Commission

Where an estate agent has been involved in the sale, the OTP must clearly set out:

• The amount or percentage of commission.
• Who is responsible for paying it (generally the seller).
• When it becomes payable (most often on registration of transfer).

This avoids disputes between the parties and ensures the agent is compensated as agreed.

9. Special Conditions

This section covers any extra terms agreed between the buyer and seller that are not part of the standard clauses. These might include:

• Repairs to be completed by the seller before transfer.
• Specific compliance certificates to be obtained by the buyer or seller.
• Municipal or environmental approvals to be secured before the sale can go through.

Special conditions should be written clearly so they are enforceable and leave no room for misunderstanding.

10. Timeframes and Deadlines

Deadlines keep a transaction moving. The OTP should outline:

• How long the buyer has to get bond approval.
• When the deposit and other payments must be made.
• When transfer should be lodged and completed.

Missing a deadline can cause delays, penalties, or even cancellation of the sale, so this section is as much about protecting the deal as it is about managing expectations.

CHA Property – Property Professionals Cape Town

An Offer to Purchase is the backbone of any property transaction. Every clause serves a purpose, and none should be treated as fine print. Understanding what each means — and making sure it’s written clearly — helps both buyers and sellers move forward with confidence.

For smooth, professional transactions, CHA Property ensures that OTPs are properly structured, timelines are realistic, and every term is in place to protect the deal from start to finish.