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Sarrahwitz v Maritz NO and Another 2015 (4) SA 491 (CC)

In the case of Sarrahwitz v Maritz NO and Another 2015 (4) SA 491 (CC), the Constitutional Court of South Africa was asked to decide whether the Alienation of Land Act 68 of 1981 (Land Act) discriminated against vulnerable purchasers of residential property who paid the full purchase price within a year of the sale agreement.

Ms Sarrahwitz entered into a sale agreement with Mr Posthumus to purchase a house. She borrowed money from her employer and paid the full purchase price in one lump sum. However, before she could be registered as the owner of the property, Mr Posthumus became insolvent. The trustee in his insolvent estate refused to transfer the property to Ms Sarrahwitz, on the basis that she was not entitled to do so under the Land Act.

The High Court held that the Land Act did not protect vulnerable purchasers who paid the full purchase price within a year of the sale agreement. The Court found that the Land Act only protected vulnerable purchasers who paid the purchase price in instalments, over a period of one year or longer. The Court held that this distinction was not justifiable, and that it violated the right to equality in section 9(1) of the Constitution.

The Constitutional Court upheld the High Court’s decision. The Court found that the Land Act’s distinction between vulnerable purchasers who paid the purchase price in instalments and those who paid the full purchase price within a year was not rationally connected to any legitimate government purpose. The Court held that the distinction was therefore unfair and discriminatory, and that it violated the right to equality in section 9(1) of the Constitution.

The Constitutional Court’s decision in Sarrahwitz has important implications for vulnerable purchasers of residential property. The decision means that vulnerable purchasers who pay the full purchase price within a year of the sale agreement are now entitled to the same protection under the Land Act as vulnerable purchasers who pay the purchase price in instalments. This means that vulnerable purchasers who pay the full purchase price within a year of the sale agreement can now demand transfer of the property if the seller becomes insolvent.

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