Novation agreement: transfer of architectural or building contract

About this novation agreement

Use this novation agreement to transfer a contract for the design or build of a property to the purchaser on the sale of land. It can be used to novate any building contract, usually with only minimal editing.

The consent of all three parties: the transferee, the transferor and the other contracting party is required to effect the transfer.

When to use this novation agreement

Typically (although not exclusively) this agreement would be used in the following situations:

• When the owner of a development is forced to sell before completing the project and the buyer wishes the existing contractor to continue the development
• When an unincorporated business is sold along with an unfinished land or building development

This agreement could be bought by:

• A seller looking to make the purchase of his land as easy and attractive for a buyer as possible (even easier if the agreement is signed by the contractor in advance of the sale)
• A buyer wishing to sort out the affairs of a seller having bought an unfinished property
• A builder, tradesman or architect who wants to keep developing the site even though the customer changes

Agreement features and contents

• Suitable when either party is resident outside the South Africa;
• Ensures a legal transfer as it is drawn as an agreement between all parties;
• Comprehensive provisions provide ideas for you to mould

The agreement contains the following sections:

• Details of the parties;
• Indemnity clause to protect both parties from loss, damage or legal liability once the contract is transferred;
• The novation;
• Other usual legal provisions in plain English.