A sale of land must be in writing and signed by the parties or by their authorised agents. This has been the clear position under South African law has been clear for many years. This requirement is set out in section 2(1) of the Alienation of Land Act 68 of 1981 and has long been understood as a safeguard against uncertainty, fraud and disputes in property transactions.
A recent judgment of the Gauteng Division of the High Court, Pretoria, has now placed the requirement under constitutional scrutiny.
In Dlomo v De Klerk and Others, the Court was asked to consider whether the Alienation of Land Act is unconstitutional to the extent that it does not recognise oral agreements for the sale of residential property, even where vulnerable purchasers have paid the full purchase price, or a substantial portion of it and face the risk of losing their home. The judgment has already attracted attention because, if confirmed by the Constitutional Court, it may create an important exception to the strict writing requirement in certain residential property transactions.
Facts before the Court
The applicants were former spouses and parents of two minor children. They had occupied the property in question for several years. Although there had initially been a written offer to purchase, that agreement was later terminated and replaced by an oral agreement in terms of which the applicants would purchase the property for R1 million. According to the judgment, they paid almost the entire purchase price, largely from pension benefits, directly to the seller.
Despite this payment, transfer was not effected. The sellers later refused to proceed with the transfer, relying on the fact that section 2(1) of the Alienation of Land Act requires a written deed of alienation. The applicants remained in occupation of the property with their children and faced the risk of eviction and homelessness.
The case therefore raised a difficult question. Should the law continue to treat the oral agreement as unenforceable, even where the purchasers had substantially performed and the result could be the loss of their home?
Constitutional view
The Court considered the matter through the lens of several constitutional rights, including the right of access to adequate housing, the right to dignity, the right to equality and the best interests of children.
The Court found that the applicants were not simply trying to obtain housing for the first time. They were already living in the property and had made substantial payment towards acquiring it. In the Court’s view, the strict operation of section 2(1) exposed them to the loss of their existing home because of a formal legal requirement.
The Court also found that the Act differentiates between vulnerable purchasers who have written agreements and vulnerable purchasers who have oral agreements, even where both may have paid substantial amounts and face the same risk of homelessness. It held that this differentiation amounted to legislative under-inclusivity and that no adequate governmental purpose had been advanced to justify the exclusion.
The Court order
The High Court declared that the failure of the Alienation of Land Act to provide for the transfer of residential property pursuant to an oral or verbal agreement, where this is necessary to prevent homelessness of vulnerable purchasers who have paid the full purchase price or a reasonable portion of it, is inconsistent with the Constitution and invalid.
The Court also ordered that section 2(1) be read as including wording to the effect that an oral or verbal agreement for the transfer of residential property shall be binding and enforceable.
Importantly, however, the declaration of invalidity and the reading-in remedy were suspended pending confirmation by the Constitutional Court. The judgment has been referred to the Constitutional Court for confirmation in terms of section 172(2)(a) of the Constitution.
This qualification is critical - the High Court has raised a potentially major constitutional challenge to the existing law but the Constitutional Court must still confirm the declaration of invalidity before it becomes final. Commentary on the judgment has also noted that it remains subject to Constitutional Court confirmation.
Are verbal property sales now valid?
Not in the ordinary sense. For now, the safest and most accurate advice remains that agreements for the sale of land should be recorded in writing and properly signed. The judgment does not create a free-standing licence to buy or sell residential property by handshake, WhatsApp messages, family arrangements or informal promises.
Even if confirmed by the Constitutional Court, the judgment is likely to apply only in carefully defined circumstances. The facts before the Court involved residential property, vulnerable purchasers, substantial payment, occupation of the property and the risk of homelessness. It was not a commercial property transaction, an investment dispute or a simple buyer’s remorse case.
The judgment should therefore not be read as removing the need for proper written agreements. Instead, it may create a constitutional safety valve for exceptional cases where strict compliance with the Act would produce an unjust and potentially unconstitutional outcome.
Practical implications for buyers and sellers
For purchasers, the judgment is a reminder that payment alone does not always protect you. A buyer may believe that they have “bought” a property because money has changed hands, but without a properly signed written agreement, they may face serious legal obstacles when trying to compel transfer.
For sellers, the case is equally important. Accepting substantial payments without properly documenting the transaction can create significant risk. A seller who treats an informal arrangement casually may later face litigation, especially where the purchaser has moved into the property, paid a large portion of the price or made life-changing financial decisions based on the agreement.
For estate agents, conveyancers and property professionals, the judgment reinforces the importance of reducing agreements to writing as early and clearly as possible. It also highlights the need to identify vulnerable purchasers and avoid informal arrangements that may later create constitutional, eviction or transfer disputes.
Key takeaway
The Dlomo judgment is potentially a significant development in South African property law, but it should be approached with caution. Until the Constitutional Court confirms the order, section 2(1) of the Alienation of Land Act remains the central rule: sales of land should be in writing and signed by the parties.
The judgment does, however, send an important message. Formalities serve an important purpose, but they should not become a tool for injustice where vulnerable people have substantially performed, occupied a home and face homelessness because the law does not recognise the reality of their agreement.
For clients involved in buying, selling or transferring residential property, the practical advice remains; put the agreement in writing, ensure it is properly signed, obtain legal advice before money changes hands and do not rely on informal promises when the subject matter is a home.
A copy of the judgment can be found here:
