Verbal deals still need documents for legal purposes

By - Jan 1st 1970

I want to buy land which the owner has verbally assured me to take over ownership once I pay him the full amount in cash. I shared this with a colleague who insisted that I get a lawyer to prepare a sale agreement which we should both sign together with our witnesses. As a layman, what is this legal document?

Gitu, Nairobi


A property sale agreement is a legally binding document that outlines the terms and conditions for the sale of a property between two parties. It is mainly used to protect the interests of both the purchase and the vendor. A sale agreement also conforms to The Law of Contract that provides for written agreements in disposition of land hence it ensures legal compliance and validity to bind the parties.

It constitutes the terms and conditions of sale of a property by the seller to the buyer. These terms and conditions include the amount at which it is to be sold and the date of full payment. The terms and conditions included in the agreement of sale must be understood by both the buyer and seller. It ensures enforceability in the event of fraud, default in payment, breach of terms among other reasons for failure of an agreement. Lack of a written sale agreement makes it difficult to prove to the court that an agreement regarding the sale either existed or took place.

The sale agreement protects the rights and interests of the buyer and the seller because if one party fails to adhere to the contract, the other party can take legal action to recover the damages caused.  The sales agreement is prepared in triplicate – each one for the seller, purchaser and the lawyer overseeing the transaction.

Some of the important contents of a sale agreement include the identity of both the buyer and the purchaser - full names, identity card number, phone numbers, and the address code. It also includes the mutually agreed purchase price and how it is to be paid. The agreement should also have the description of the property being sold - the size of the land, title number, location and the condition of the land.

There is also the distribution of costs involved - who pays for the different costs involved in the process of transferring the land to the purchaser from the vendor? Some of the common costs will include stamp duty, legal fees and title transfer costs. The obligation of each party involved in the transaction and remedies for breach of the contract are also important provisions in the sale agreement.

To be valid – just like any legal contract – the sale agreement must provide that the seller is the registered owner with the capacity to sell as the beneficial owner of the property, the property price and the amount of deposit to be paid when signing the contract – this is mostly 10 per cent of the purchase price for most contracts.

The other important particulars include the completion date - when the completion documents change hands vis a vis payment of the balance of the purchase price, the rate of interest should be specified and also the conditions of sale.

The sale agreement must be signed by both the buyer, seller and their witnesses – in the presence of their lawyers.

— Harold Ayodo is an advocate of the High Court

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