The purchase of a new property is an exciting prospect and an endeavour most of us will only set out on once or twice during our lifetime. But what happens if your dream home turns into your worst nightmare?
South African purchasers are very likely to take the sellers word when it comes to the condition of a property, a trend supported in large by the fact that many property purchasers believe that they are protected by the Consumer Protection Act 68 of 2008 (hereinafter referred to as “the CPA”).
Unfortunately, the Act only offers protection to a purchaser if the seller regularly sells property or continually markets himself/herself as a seller of property. A “voetstoets” clause is common to agreements of sale for property and have the effect of excluding the seller from liability for latent defects of which the seller was not aware of at the time of the conclusion of the agreement of sale. Unless some form of expert knowledge can be attributed to the seller, it can be very difficult to prove beyond a reasonable doubt that a lay person was aware of a defect.
As most sales of residential property occur between private individuals, this leaves most purchasers without any real protection, while the seller enjoys substantial protection against claims based on defects due to the existence of a “voetstoots” (as is) clause.
The average purchaser will then most likely find himself/herself facing one of the following scenarios if a defect in the property is discovered after the conclusion of the sale:
The seller was aware of the defect and intentionally withheld the information from the purchaser.
In this instance, failure to disclose the defect to the purchaser would constitute fraudulent misrepresentation and the purchaser would be able to recover any damages he/she has suffered, including the cost of having to repair the defect himself/herself.
The Prescription Act affords the purchaser a period of three (3) years from the date of uncovering the defect to hold the seller liable and the purchaser would however have to prove that the seller was indeed aware of the defect and that the seller intentionally withheld the information from him/her. As set out above, this is where the difficulties in such claims often arise.
- The seller was unaware of the defect
In this instance, the seller would be protected by the “voetstoots” clause and the purchaser would have to bear the costs incurred to rectify the defect.
A purchaser can put certain measures in place to protect himself/herself from the pitfalls referred to above, prior to entering into an agreement of sale, the most common and inexpensive of these being insistence by the purchaser that all known defects be recorded in the offer to purchase. A proper record will not only assist in proving which defects were expressly disclosed to him/her prior to the acquisition of the property, but also provides a strong evidentiary basis should the purchaser need to prove that the seller failed to disclose a certain defect to him/her.
To further enable a purchaser to confidently proceed with one of the most important transactions of his/her life, it is also recommended that South African purchasers take a leaf from the book of their American counterparts and invest in the services of a competent and qualified property inspector, so that they know what they are buying.
Our professional team are available to advise you on inspections and defect lists before entering into an agreement of sale, on settling such disputes during the transfer process and to assist you with litigation.