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PROMISES IN SALES BROCHURES: DEVELOPERS AND AGENTS BEWARE

Guthrie and Another v Etango Game Lodge (Pty) Ltd and Another (66601/2010) [2011] ZAGPPHC 214
(9 December 2011)

In this recent court case a developer (seller) was ordered to deliver on promises in sales brochures given to purchasers.

The purchasers purchased (off plan) a unit to be erected on a private game reserve. The deed of sale stated that no hunting of any kind would be allowed on the property except for selective culling authorised by the body corporate. The sellers further warranted that certain specified game would reside on the common property.

Furthermore, prior to the signing of the deed of sale, the purhcasers were given a brochure which stated that: the game reserve would be fully stocked with game; a wellness centre and sports facility would be erected; and the use of a six seater game viewing vehicle would be included in the purchase price.

The purchaser’s unit was erected and they took occupation. Soon afterwards they noticed a drastic decrease in the game roaming the farm. They made enquiries and were informed by the game rangers that the developers had been selling off game. The purchasers were also unhappy about the fact that the six seater game viewing vehicle had not been provided by the developer.

After unsuccessfully trying to resolve the matter through correspondence the purchasers instituted a court action agaibst the developers. Amongst other things they asked for an order prohibiting hunting on the reserve as well as the capturing and selling of game (without the consent of the body corporate) and for an order compelling the developers to erect a wellness/sports centre and to deliver a six seater game viewing vehicle.

The developers raised numerous defences. Regarding the game, they claimed that the game had to be culled because of the size of the reserve. The court rejected the developer’s defence and granted an order to the effect that no further hunting, capturing or selling off of game could take place without the consent of the body corporate.

Regarding the wellness/sports centre and the vehicle the court held that even though the deed of sale did not state that the developers would provide these items and they were only referred to in the brochure, the developer was nevertheless bound to provide both these thing. the court’s reasoning was that there was a common intention between the parties (the developer and the seller) at the time the deed of sale was entered into that the centre would be erected and the vehicle would be provided. The court accordingly directed that the agreement of sale should be rectified by the insertion of a clause to the effect that the centre would be built and the vehicle supplied by the developers.

The case sends out a clear message that developers will be obliged to deliver on promises made in sales brochures relating to developments. Agents mandated to sell units in developments should satisfy themselves, as best they can, that the developer intends and is able to deliver on any promises made regarding features of the development and facilities to be provided.


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