A business transaction brings together two people: one seeking to acquire a property and the other seeking to dispose of it. The relationship created for the purpose of this transaction requires each of the parties to abide by the duties each holds. The seller and the buyer must understand their duties before they start any transaction.
Disclose Latent Defect
The seller must disclose latent defects of the property he is selling. Latent defect refers to any defect that the property may have which cannot be detected by the buyer using ordinary due diligence. A car may, for instance, look perfectly alright even after you have had a test drive but the seller knows that after cruising for fifty kilometers, the meter gauge fails to work. He needs to disclose this to the buyer.
Provide Title Documents
The seller must provide to the buyer all the title documents to the property. These documents are necessary so that the buyer can do thorough due diligence on the property. If the property is land, he needs the title to do a search to establish whether a loan has been taken against the property or whether another sale transaction is in progress. These documents are provided to the buyer in good faith on the understanding that they will only be used for due diligence and initiation of the purchase procedures.
Answer Buyer’s Questions
The seller must answer all questions put to him by the buyer regarding the property. When buying a property one must be sure that everything about it is legal and any questions asked should not be seen as intrusion but rather as a way of getting the facts. Don’t get annoyed when the buyer asks you why you are selling the land. Maybe he wants to gauge your answer to see whether you are selling a property that is not yours.
Pay Agreed Price
The buyer must pay the agreed price. When all the due diligence is done and all required government documentation process is finalized, the buyer has to pay so that the transaction is finished. The buyer should not suddenly say that he has run out of money and ask to be given a few months to pay. Any reluctance to pay means that the deal can be canceled.
Take Care of Title Documents
The buyer must take care of all title documents given to him by the seller in the process of the transaction. Title documents are private property but they must be given to the buyer to do due diligence. The buyer must ensure they are not destroyed or lost during the due diligence period.
Pay Public Charges and Rents
The buyer must pay all charges and rents required of the property once he takes ownership of it. These include government stamp duty charges.
Bear Loss of Value
The buyer must bear all losses arising from the change of ownership of the property. The property may lose value any time but as long as this loss of value has not been caused by the seller, the buyer bears the loss.