Instalment Sale Agreement National Credit Act

Under the National Credit Act, a tempered contract is defined as the sale of personal property. The definition shows that tempe purchase contracts for real estate are excluded from the law; But that is not the case. Under Section 40 of the Act, a seller participating in an installment sales contract must apply for registration as a lender if the lender`s total debt under all outstanding credit contracts exceeds R500,000 (this amount may be changed by the Minister of Commerce and Industry by notification in the government`s press release). However, the definition of a “lender” under the ANCA is limited to individuals who lend to individuals, and more specifically: the NCA contains specific provisions for “catch-up temper agreements” but only for personal property. Real estate generally enters the scope of the NCA through the application of the mortgage provisions. Sellers who enter into temperate purchase contracts with buyers and temperance purchase contracts that provide for an imputation, tax or interest to the seller essentially grant credits to the buyer. A catch-up tempe purchase contract does not be within the scope of the NCA if the buyer does not have a fee, fee or interest to pay to the seller. If the buyer is a small legal entity that borrows more than R250,000, the provisions of the NCA do not apply to the creditor (seller) or the credit contract (term purchase contract). If the purchaser is a large corporation (annual turnover or assets greater than R1 million), the provisions of the NCA do not apply, regardless of the amount of money borrowed. Section 100, paragraph 2 of the NCA states that “the credit provider cannot charge a consumer, for goods or services, a higher price than the credit provider`s request for the same goods or services, or essentially similar, in normal business transactions, on the basis of a cash transaction.” As a result, sellers cannot “burden” the price of goods and services sold on credit to circumvent the provisions of the NCA.

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