Am I liable for property defect?

2016-05-11 06:00
LUHANN PRINSLOO, associate at Phatshoane Henney Attorneys.

LUHANN PRINSLOO, associate at Phatshoane Henney Attorneys.

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Question:

I RECENTLY bought a beach house. With our first stay there, I discovered extensive rainwater leakage through the roof into the house. I asked a local builder to fix the problem, but he advised me that this would be pricey, given major structural problems with the roof and an inadequate roof pitch. The seller never mentioned anything about these problems. The contract did contain a “voetstoots” clause, but surely this can’t protect the seller from all liability?

Answer:

In terms of our common law when an item is sold, there is an implied warranty against defects in that item. However, the seller of the item is able to dispose of this warranty by stating that the item is sold “voetstoots,” or loosely translated, “as is”, no matter what the condition of the item. This allows a seller to be freed from the liability for both patent (obvious) and latent (hidden) defects.

A patent defect is typically a flaw which is apparent on a normal inspection of the property. This would include things like wall cracks, broken fittings, et cetera. A latent defect, on the other hand, is not obvious and generally hidden from your view and not visible on a reasonable viewing of the property. Leaking pipes behind a wall, rising damp and structural issues with a beach house roof are good examples.

One must now consider whether you are bound to the voetstoots clause or if you are eligible for the protection afforded by the Consumer Protection Act (“CPA”). The CPA allows for consumers to receive their bought goods free from defects, effectively nullifying any voetstoots clause. However, this protection is only afforded where the seller is not a typical once-off private seller, but a developer, speculator, or investor with a property portfolio who falls under the definition of a “supplier” (as defined by the CPA) and which acted in the ordinary course of his business when the property was sold to you. In such a case, you will have the protection of the CPA and the voetstoots clause will be nullified. If, however, you bought the property from a private seller in a once-off transaction, the CPA will not apply and the voetstoots clause will remain applicable.

One should, however, keep in mind that a voetstoots clause will not protect a seller where he failed to disclose a defect in bad faith or fraudulently. It is trite law in South Africa that a seller shall only be excused from liability for latent defects where he himself was not aware of the flaw at the time of the sale and the seller thus has a duty to disclose any latent defects of which he is aware, failing which the seller also cannot rely on a valid voetstoots clause. Equally, the purchaser has a reasonable duty to inspect the property himself.

For a purchaser to succeed with a claim in spite of a valid voetstoots clause, the purchaser must 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 the abovementioned, he may either a) claim damages, or b) if the defect is serous, cancel the sale and claim repayment of the purchase price and interest thereon, or 3) claim a price reduction.

It is advisable that you consult with an attorney regarding your available remedies.

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