What does an ‘Option’ and ‘Right of First Refusal’ mean?

Writer: LB Vorster.

An Option in respect of immovable property is nothing more than an offer by the owner (the grantor) to sell his/her/its property to a potential purchaser (the grantee) on certain specified terms and conditions, coupled with an undertaking by the grantor not to withdraw such offer within a specified period of time (the option period).

The legal requirements for a valid and enforceable Option are: It has to be in writing and signed by the grantor on granting the option (making the offer) and by the grantee on exercising the option (accepting the offer); and It must contain the essential terms of the sale.

The essential terms are normally:

• the identity of the parties (grantor and grantee or their agents acting on their written authority), correctly described; and

• the subject matter of the sale (identity of the immovable property), once again, correctly described; and

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