As you cannot buy goods voetstoots anymore in transactions that fall under the Consumer Protection Act, consumers wonder if you can then really buy property voetstoots?
Consumers then find it confusing to hear about a voetstoots clause, which is a common term on property transactions. Even sellers sometimes encounter it when the new owner sues them for defects discovered after the transaction is completed.
The answer lies in the difference between what constitutes a latent defect and a patent defect, according to Fatima Gattoo, director at Cliffe Dekker Hofmeyr and Fatima Essa, an associate at the firm.
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What is a patent defect?
They say in simple terminology, you can see a patent defect with the naked eye. When you buy a property, you will probably view several homes before you find your dream home. Maybe some of them had a cracked wall or a broken window.
“This type of defect is defined as a patent defect because you can clearly see it during a reasonable inspection. TheLaw.com law dictionary and Black’s Law Dictionary describe a patent defect as “an obvious flaw that is capable of being seen on the surface with casual inspection”.
Patent defects include wall cracks, sagging gutters, broken windows and missing tiles. Details of these defects that you can see and who will be responsible for paying for the repairs should ideally be included in the offer to purchase in the property transaction.
Gattoo and Essa also say that if these defects are recorded, it will create a strong basis of evidence for the seller to argue that the buyer was aware of the defects and is, therefore, not entitled to damages based on the fact that it was hidden.
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What is a latent defect?
A latent defect, on the other hand, is one that only an expert would be able to identify. It will not be apparent to a reasonable person inspecting a property. Latent defects can include rising damp, faulty pool pumps or geysers, rusted internal pipes and leaking roofs.
Most sellers are aware of the problems caused by latent defects in a property transaction and that is why they include a clause called the “voetstoots clause“ in the offer to purchase/sale agreement.
“Voetstoots“, is described in the Collins Dictionary as “denoting a sale in which the vendor is freed from all responsibility for the conditions of the goods being sold”.
The word literally translated means “as it is”.
The voetstoots clause protects the seller against all defects in the property, including all latent defects which the seller does not know about. If the seller was aware of a latent defect and deliberately concealed this from the buyer, the buyer will have a right of recourse against the seller, Gattoo and Essa say.
They also point out that this principle was confirmed in a recent case where the court said that a seller is deprived of the protection of a voetstoots clause in circumstances where the seller perpetrated a fraudulent non-disclosure.
In plain English this means that the seller cannot call on the protection of a voetstoots clause if he hid a defect in the house on purpose to make you buy the house without being aware of it.
If a buyer identifies a defect after the sale of the property is concluded, the buyer must prove that the seller was aware of the defect and fraudulently or deliberately concealed it while concluding the transaction.
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What a court will consider in a voetstoots property transaction
Gattoo and Essa says the court will consider objective factors to decide if the seller deliberately concealed the defect and if it is found that the seller was in fact acting fraudulently, the seller may be required to refund part of the purchase price or rectify the defect in question.
“However, the reality is that it is quite onerous for the buyer to prove that the seller was aware of the defect and deliberately concealed this from the buyer. Therefore, when a property is for sale, the seller has a duty to reveal to the buyer any latent defects to the property at the time of concluding and signing the offer to purchase or sale agreement.”
They says this is an important step for the seller to avoid being held liable for undisclosed defects at a later stage.
The court also recently emphasised the seller’s duty to disclose in a case where the property was going to be used as a guesthouse. It was important that the structure was well-maintained to conduct a business.
“The fact that there were extensive leakage problems with the roof is material and the seller had a duty to disclose this to the buyer. Taking into consideration the circumstances in which the seller failed to disclose the true extent of the leakage and defects of the roof, the court came to the conclusion that the seller withheld the information to secure the sale for his own benefit.”
However, they point out that it must be noted that the buyer also has a duty to fully inspect the property before buying it and will, therefore, not be able to later claim that he or she was not aware of patent defects.
They also warn that before you jump through all the hoops of negotiating the purchase price, buying an existing property and then qualifying for finance, it is imperative for any prospective buyer to thoroughly inspect the property before making an offer, particularly when buying in a complex.
“Speak to other residents and neighbours in the complex who might be aware of potential drainage or water issues. This inspection should include moving any large items to ensure that the areas obstructed by these are free of defects. Large cabinets, for example, must be moved because they can potentially hide cracks or damp.”
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Protection from the new Property Practitioners Act
The Property Practitioners Act that came into effect last year also makes it compulsory for parties to sign a complete and comprehensive Defects List which forms part of the offer to purchase or sale agreement.
This document is then presented to the buyer to ensure complete transparency between seller and buyer regarding the condition of the property. Gattoo and Essa say you could also use the services of a home inspector or an expert to do an assessment of the property, to ensure that there are no underlying defects in the property and ensure that the plans for the property are up to date and in order so that what appears on the property also appears on the plans.
They say it is important for buyers to note that the absence of statutory permissions, such as approved building or alteration plans, are also considered latent defects which are also covered by the voetstoots provision.