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What should you keep in mind when buying property on auction?

An auction is generally described as a public sale in which goods or property are sold to the highest bidder. Banking institutions have traditionally used auctions to achieve successful sales of a property in respect of which a court order has authorised an execution sale. Lately, however, more and more private sellers opt to have their property auctioned, believing it will attract more interest from prospective buyers.

Property sold on auction is generally sold voetstoots (in other words, “as is”, with its visible and invisible defects). Buyers therefore seldom have recourse if they are not satisfied, subsequent to the sale, with the condition of the property they have purchased. Notably, section 55 of the Consumer Protection Act, which provides that consumers have the right to "safe, good quality goods" does not apply to goods bought on auction.

It is therefore imperative that care must be taken in such instances and a buyer must, amongst other things, attend to the following before making a bid:

  1. Inspect the property in as much detail as possible;

  2. Obtain a copy of the conditions of sale;

  3. Check if the property is currently being leased;

  4. If the property is a unit in a sectional title scheme, enquire what the amount of monthly levies and rates are;

  5. Obtain a copy of the title deed and the approved diagrams, so that you are acquainted with the servitudes on the property. Although this may seldom be made available to the prospective buyer by the auctioneer, you can attend to web searches alternatively ask the auctioneer in advance on the availability of these documents or approach your conveyancer.

An upfront deposit is generally payable, which amount is a percentage of the purchase price. Further to the deposit, you may be liable to pay the auctioneer’s commission as well as outstanding rates and taxes. Usually auctions are further conducted with a reserve price in place. If this is the case and the highest bid does not reach this amount, the sale will be made subject to the confirmation of the seller.

It is important to note that if the purchaser is in breach of contract, the seller has the right to legal recourse. The general breach clauses contained in these agreements are the following:

  • The seller shall be entitled to cancel the agreement upon written notice and claim damages as a result of the breach;

  • Immediately claim payment of the full purchase price and specific performance.

If damages are claimed, the deposit and agent's commission that was initially paid could be forfeited.

It is imperative that you attend to the necessary checks to prevent finding yourself in a situation where you suffer from buyer’s remorse.

For more information, contact us on 041 363 6044 or email us at

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This article is not intended to constitute legal advice and is produced for information purposes only and to provide a general understanding of the legal position relating to the topic. It is recommended that advice relating to the specific circumstances of your situation be sought from our attorneys before acting upon the content of this article. This article was written at a particular point in time and accordingly may not always reflect the most recent legal developments, if any, applicable to the relevant topic. Kaplan Blumberg and its partners and/or employees, are not responsible for any consequences which may follow upon any decision taken to act upon the information provided in this article.

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