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September 28, 2021

National Credit Act And Instalment Sale Agreement

Filed under: Uncategorized — Mark Baker @ 7:43 am

Section 40 of the Act requires registration as a credit provider if one has at least 100 credit agreements as a credit provider or if the total principal debt exceeds R500,000 under all credit agreements. Principal debt refers to the amount carried forward and does not include interest or other charges. Section 100(2) of the ACA provides that “a credit provider may not charge a consumer a higher price for goods or services than the price that the creditor calculates on the basis of a cash transaction for the same substantially similar goods or services”. As a result, sellers cannot “weigh” on the price of goods and services sold on credit to circumvent the provisions of the CAS. In summary, a tempe purchase agreement is definitely considered an option for potential owners who are not able to obtain the necessary financing. However, it is important that both parties consider the necessary procedures and costs. The seller must also take into account that he cannot collect any fees or interest on the purchase price or increase the purchase price inappropriately. If the seller wishes to collect fees or interest, it must register as a credit provider and conduct an appropriate financial check of the buyer. In the event that the seller is not registered as a credit provider, the sale may be considered questionable. 5.

Finally, the fact that if interest were to be charged on rates, as might be expected, and the buyer is a consumer under the National Credit Act, then all the requirements of the NCA apply equally. Seller, beware if you enter into these types of agreements, as non-compliance with the law can be an expensive exercise. In the event of a sale of real estate, it often happens that the parties agree to a deferred payment of the purchase price. The buyer then pays the purchase price in instalments and the seller calculates interest on the outstanding amount from time to time. Sometimes the parties even agree to register a loan on the property to ensure payment of the purchase price….

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