There is no easy answer to this question. There are many variables that must be considered before it can be established whether you have a claim and if so, what your claim is for.
- Different types of defects
The seller is, by law, obliged to disclose any defects in the property of which he or she is aware at the time of the sale. Under our law there are two kinds of defects:
- Patent defects
A patent defect is a defect that is clearly visible on inspection of the property, for example a broken window, cracks in a wall or water damage. All patent defects should be listed in the offer to purchase, along with who is responsible for fixing them. Because patent defects are visible or obvious without professional inspection, the purchaser has no recourse against these types of defects should he or she only see it after the conclusion of the sale.
It is up to the purchaser to do a thorough inspection of the property to spot any patent defects.
- Latent defects
A latent defect is a defect that is not easily picked up by a superficial inspection. Examples include a leaking roof, faulty geyser or even building works based on plans that were not approved properly. Common law states that the seller is responsible for all latent defects in the property for 3 (three) years from the date of discovery of the defect by the purchaser where after such claim will prescribe.
However, it is important to note that a seller cannot be held liable for defects he or she was unaware of.
- The dreaded voetstoots clause
As most sellers are aware that they are responsible for latent defects, a voetstoots clause is included in the sale agreement to protect the seller to a certain degree. If you bought a property and signed an offer to purchase, it is almost certain that there was a voetstoots clause written into it. Such a clause would read something like this:
“The property is sold ‘voetstoots’, as is at the date of signature hereof, together with all fixtures and fittings and subject to the conditions and servitudes contained in the title deeds of the property as it stands on the date this agreement is concluded, with all visible and invisible defects applicable to such a property.”
This seems extremely constrictive, but it is not the end of the road for you if you do find defects in the property after you have moved in.
If the seller was aware of a defect and failed to disclose it, the seller’s behaviour could constitute a fraudulent misrepresentation. Although many sellers believe that the voetstoots clause absolves them of all responsibility as the property is sold as is, the courts have often found otherwise.
Under common law, once a purchaser becomes aware of a defect and it is evident that the fault existed in the property at the time of purchase and the seller was aware of it or should have reasonably been aware, the purchaser may recover any damages he or she has suffered as a result, including the cost of having to repair the defect.
For a purchaser to succeed with such a claim in spite of a valid voetstoots clause, the onus of proof will be on the purchaser to prove that the seller was aware of the latent defect at the time of the conclusion of a contract of sale and deliberately concealed the defect.
Should the purchaser successfully prove this, he or she may either a) claim monetary damages, or b) if the defect is serious, cancel the sale and claim repayment of the purchase price and interest thereon, or 3) claim a price reduction.
- Will the CPA apply?
In property dealings, most transactions do not fall under the application of the Consumer Protection Act 68 of 2008 (“CPA”). One such transaction is the sale of a residential property by a normal seller by private treaty (negotiated between the buyer and the seller). Such a seller is not a “supplier” as defined in the CPA. This, naturally, leads to considerable frustration for a purchaser who has neglected to thoroughly inspect the property he or she is about to purchase, with the belief that he or she will be fully protected by the CPA.
However, transactions where properties are sold by investors, speculators, traders, builders and developers “in the ordinary course of business” are fully protected by the CPA. In these cases, the seller will fall within the definition of a supplier and the effect of this is that a ‘voetstoots’ clause cannot be applied by the seller, even if it is written into the sale agreement. Defects will be deemed to be the seller’s responsibility and he or she will be liable to either fix same or pay compensation to the purchaser.
A thorough inspection of a property that you wish to purchase must always be undertaken. If the CPA applies to your transaction, it will be easier to hold the seller accountable for latent defects, but if the CPA does not protect you, you must prove intentional fraudulent misrepresentation on the seller’s side, which is not an easy feat.
It will always be harder to win this fight if you signed an agreement with a voetstoots clause or even worse, an annexure stating that you inspected the property and found no defects.
If you are struggling with this situation, feel free to contact us for advice!