Offer to Purchase (OTP) Guide
The Offer to Purchase (also called a Sale Agreement) is the legally binding contract between buyer and seller in a South African property transaction. This guide explains what every OTP must contain and how to protect yourself.
What Is an Offer to Purchase?
An Offer to Purchase (OTP) is a legally binding written agreement between the buyer and seller of a property. Once both parties sign, it becomes a contract enforceable in a court of law.
In South Africa, a property sale is not valid without a written agreement — verbal agreements are not enforceable for immovable property under the Alienation of Land Act (Act 68 of 1981).
When selling privately (without an estate agent), the buyer or seller typically drafts the OTP, or you can have a conveyancing attorney prepare one. It does not need to be on a specific form — any written agreement that covers the essential terms is valid.
What Every OTP Must Include
For an OTP to be legally valid and enforceable, it must contain these essential elements:
Full details of both parties
Full legal names, ID numbers, marital status, and residential addresses of both the buyer and seller. If either party is a company or trust, include registration numbers.
Property description
The full and correct property description as it appears on the title deed — erf number, township/suburb, and municipality. The physical address alone is not sufficient.
Purchase price
The agreed purchase price in Rands. State whether the price includes VAT (if the seller is VAT-registered). Note whether the price is fixed or negotiable.
Payment terms
How the purchase price will be paid: cash, bond (mortgage), or a combination. Include the deposit amount (if any) and when it must be paid. Specify the bank or financial institution if a bond is required.
Occupation date
When the buyer takes physical occupation of the property. This is not necessarily the same as transfer date. Include occupational rent if the buyer moves in before or after transfer.
Suspensive conditions
Conditions that must be met for the sale to proceed. The most common is a bond approval clause — giving the buyer a set number of days to secure finance. If conditions are not met, the agreement falls away.
Voetstoots clause / defects disclosure
Whether the property is sold 'voetstoots' (as-is). Under the Consumer Protection Act (CPA), the seller must still disclose known latent defects. Failure to disclose can void the voetstoots clause.
Compliance certificates
Which compliance certificates (Electrical, Gas, Electric Fence, Plumbing, Beetle) the seller will provide. By law, the Electrical COC is mandatory for all transfers. Others depend on the property.
Nominated conveyancer
The conveyancing attorney who will handle the transfer. Traditionally the seller has the right to nominate the transferring attorney, but this can be agreed by both parties.
Signatures and date
Both parties must sign and date the agreement. Witnesses are recommended (two per signatory) though not strictly required for all OTPs. The date establishes when time-based conditions start.
Common Suspensive Conditions
Suspensive conditions protect both parties. If a condition is not fulfilled within the specified time, the agreement automatically falls away and the deposit (if any) is returned.
| Condition | Typical timeframe | Who it protects |
|---|---|---|
| Bond approval | 14–30 business days | Buyer |
| Sale of existing property | 30–90 days | Buyer |
| Building plan approval | As negotiated | Both |
| Structural inspection | 7–14 days | Buyer |
| Rezoning approval | As negotiated | Both |
| Body corporate consent (sectional title) | 14–30 days | Both |
CPA Cooling-Off Period
Under the Consumer Protection Act (Section 16), if a property transaction qualifies as "direct marketing" (i.e., the buyer was approached or solicited), the buyer has 5 business days to cancel the agreement without penalty.
This cooling-off period is debatable for private sales where the buyer initiates contact through a platform like OwnersOnly. However, it's good practice to be aware of this right. If in doubt, consult your conveyancer.
Note: The CPA does not apply to transactions between two businesses, or to properties above a certain threshold where both parties are experienced in property transactions.
Common OTP Mistakes to Avoid
No bond clause
Always include a suspensive condition for bond approval with a specific timeframe (e.g., 21 business days).
Vague property description
Use the exact erf/unit number and township name from the title deed — not just the street address.
No occupation date
Specify when the buyer takes occupation and what occupational rent applies if different from transfer date.
Missing defects disclosure
The seller must list all known defects. Hiding defects can void the voetstoots clause and expose the seller to a claim.
Unsigned by both parties
The OTP is only binding once both buyer and seller have signed. An unsigned offer is just a proposal.
No deposit terms
State the deposit amount, when it's due, and into whose trust account it will be paid (usually the conveyancer's).
Legal Disclaimer
This guide is for educational purposes only and does not constitute legal advice. OwnersOnly does not provide OTP templates or legal documents. We strongly recommend that both buyer and seller engage a registered conveyancing attorney to draft or review the Offer to Purchase before signing. Every property transaction is unique — consult a professional for advice specific to your situation.