1 Introduction

You have bought a house and transferred the purchase price, but the seller goes bankrupt prior to conveyance. Whether and to what extent will you still be able to receive the ownership of your new residence? It is a classical property law dilemma which has sparked academic debate in many jurisdictions. In Scotland, this question was embodied by a rather legalistic and technical debate following the Sharp v Thomson and the Burnett’s Trustee v Grainger judgments. In South Africa, Sarrahwitz v Martiz provides a human-rights-based approach to this question. German doctrine has focused on the ‘Vormerkung’ (also known as advance/priority notice), whereas the Dutch solution is centered around the client account of the civil law notary. In Anglo-American jurisdictions, the Vendor Purchaser Constructive Trust immediately comes to mind.

In the context of other types of assets than immovables, the outcome based on the prior tempore-principle is often deemed satisfactory. This principle entails that if the establishment of the concursus creditorum/fixation of the debtors’ assets takes place prior to delivery, the transferor lacks the necessary power to dispose and hence, the transfer can no longer take place.1 However, in the context of immovable property, especially property for housing purposes, many scholars feel it is justified to provide additional protective measures in favour of the buyer. But exactly which circumstances justify these protective measures under current law? What are the implications of these measures for the legal practitioners involved in the transfer of land? And what is the most desirable way to protect the buyer in terms of scope of application and effect?

This article will answer these questions by providing a theoretical framework that enables us to compare these protective measures, by examining how these measures ‘score’ on different features of proprietary interests. Section 2 explores the central problem of this article and its background, and introduces said theoretical framework. Section 3 applies the conceptual framework to the South-African, German, Dutch and Anglo-American solution, and hence answers the question as to when buyers are protected and what this implies for legal practitioners. Section 4 scrutinises whether and to what extent the protection of the buyer is desirable, and uses the transaction costs as its most important criterion to determine the desirable traits of each instrument. Section 5 provides a conclusion.