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The Short Sale Purchase Agreement is a crucial document used in South African property transactions where the seller, due to financial distress, needs to sell their property for less than the outstanding mortgage amount. This agreement is specifically designed to address the unique challenges and requirements of short sale transactions under South African law, including compliance with the Alienation of Land Act and other relevant property legislation. It requires careful consideration of the rights and obligations of the seller, buyer, and mortgage holder, while incorporating necessary provisions for bank approval, transfer procedures, and risk allocation. The document is particularly relevant in economic downturns or when property values have decreased significantly, providing a structured framework for resolving distressed property situations while protecting all parties' interests.

1. Parties: Identification of the Seller, Buyer, and acknowledgment of the Mortgage Holder/Bank

2. Background: Context of the short sale, including acknowledgment of the outstanding mortgage amount and current market value

3. Definitions: Key terms used throughout the agreement, including specific short sale-related terminology

4. Property Description: Detailed description of the property being sold, including physical address and legal description

5. Purchase Price: Agreed purchase price and acknowledgment that it is less than the outstanding mortgage amount

6. Bank Approval: Conditions relating to the mortgage holder's approval of the short sale

7. Payment Terms: Structure and timing of payments, including deposits and final payment arrangements

8. Conditions Precedent: Conditions that must be met before the agreement becomes effective, including bank approval

9. Due Diligence: Buyer's rights and timeframes for property inspection and verification

10. Transfer and Registration: Process and requirements for property transfer and registration

11. Risk and Possession: Transfer of risk and arrangements for possession of the property

12. Warranties: Limited warranties given by the seller, acknowledging the distressed nature of the sale

13. Default Provisions: Consequences of default by either party

14. Notices: Communication requirements and contact details for all parties

15. General Provisions: Standard legal provisions including governing law, jurisdiction, and entire agreement