When an offer to purchase residential land is made to the vendor’s agent or the agent’s sales representative, the agent or sales representative is required to pass this offer on to the vendor within 48 hours. This is the case even if the offer is below the vendor’s minimum acceptable price. However, although this is required by law, there is no obligation on the agent to prove to the person making the offer that it has in fact been passed on to the vendor.
The offer must be recorded in writing and contain the information prescribed by regulation 20 of the Land and Business (Sale and Conveyancing) Regulations 2010 (SA) before being signed by the person making the offer. It is the agent’s responsibility to take all reasonable steps to put the offer in the correct form and there are penalties for failing to do so.
See Land and Business (Sale and Conveyancing) Act 1994 (SA) s 21(1).
Where there has not been sufficient time for an offer to be recorded in writing, the agent or sales representative must ensure that the vendor has been notified of the proposed offer before any other offer can be accepted.
An offer is not legally binding and the person who has made the offer can withdraw it at any time prior to signing a sales contract. Sometimes an offer will be made by a potential purchaser by signing a sales contract for the offer amount. This will then be taken by the agent to the vendor. If the vendor then signs the contract, it becomes binding on the purchaser [see Land and Business (Sale and Conveyancing) Regulations 2010 (SA) s 20]. However, the purchaser will still have 2 clear days in which to cool off on the contract and can revoke the contract at any time during this period [see Land and Business (Sale and Conveyancing) Act 1994 (SA) s 5].