Does the new consumer Protection Act mean Voetstoots is dead?

2011-03-01 00:00

WHEN I buy a house, our common law makes the seller liable to deliver that house to me free of any defect.

To relieve the seller of that obligation, most contracts for the sale of second-hand houses include an “as is” or voetstoots clause.

A voetstoots clause usually frees the seller from liability for visible and invisible (latent) defects which exists on sale.

A voetstoots clause does not cover invisible defects which the seller knows about, but did not disclose (as he is usually liable for those anyway) and which arise after delivery of the house.

There have been statements made that when the Consumer Protection Act, (CPA) kicks in, such clauses will become extinct. Hardly.

The CPA applies to sellers who sell houses to home buyers in the ordinary course of the seller’s business as well as those sellers who build homes.

The once-off seller who sells a house certainly does not make a business of selling homes; therefore the CPA does not apply to a sale he might make.

When a seller is in the business of selling new homes, the CPA will quite probably be interpreted to mean that the insertion of a voetstoots clause would be unfair and would breach the implied warranty of quality contained in the act.

May a seller who conducts a business of selling used homes insert a voetstoots clause in his sales contract?

Quite probably, yes, provided that this assumption of risk is drawn to the attention of the purchaser.

In essence the CPA:

• Will reinforce the existing common law position that sellers in the business of selling new houses must deliver a house that is free of defects

• Will compel dealers in second-hand houses to make their contracts clear to purchasers

An individual selling a house as a once-off sale is not affected by the CPA and could thus validly insert a voetstoots clause in the contract of sale.

Long live voetstoots!

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