Property Defects Full Disclosure Required By Consumer Protection Act

Property defects must be fully disclosed
Property defects must be fully disclosed

Under the new Consumer Protection Act full disclosure of property defects or potential defects has become essential.

From 1 April 2011, developers, speculators, and investors with property portfolios who sell property in their ordinary course of business can no longer rely on the Voetstoots clause to limit their liability for defects. In fact the new act makes it illegal not to specify these in writing. Failure to do so can have dire consequences and could even lead to the cancellation of the sale and a full refund of the purchase price.

Previously the voetstoots clause (voetstoots is a term derived from Roman Dutch Law and means literally “as is”) protected the seller who was able to rely on the fact that it was the buyers responsibility to examine the property for any defects on the principal of caveat emptor or “buyer beware.” Previously an aggrieved buyer had to prove that a seller deliberately withheld information on a defect or was ignorant of a defect that any conscientious seller should have known about.

Under the CPA, no matter how little the seller knows, or could have known, the seller can be held liable for a defect which is discovered by the buyer after transfer takes place.

This has led to a growth industry in the form of Home Inspectors who, for a fee, will check the entire property from top to bottom and produce a detailed report which can be shown to the buyer. This is intended to remove the uncertainty from the sale and to help prevent “nasty surprises” from cropping up once the property has changed hands.

In practice very few people have the required expertise in such a wide spread of disciplines — plumbing, electrical, structural, waterproofing, finishing, etc. Furthermore, the average inspector is unlikely to do better in the way of identifying defects than the average owner doing a comprehensive inspection on his own.

The boundaries of a property are of critical importance and it is essential to establish that the boundary walls are correctly positioned and that they do not encroach on adjoining properties. Agents acting on behalf of sellers should make sure that they have access to site diagrams that indicate exactly the extent of the property. Sellers and their agents should also be aware of any proposed zoning changes in the area.

It is incumbent on the agent to show any defects to the buyer that the seller has revealed. In addition the agent needs to be proactive about physically examining the property and needs to ask probing questions of the seller regarding crime in the area, municipal services problems, noisy neighbours or noisy dogs. Failure to do so will provide buyers with grounds for legal recourse, compensation and even grounds for cancellation where appropriate.

If there is anything you would like to add, please feel free to do so in the comments.

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132 thoughts on “Property Defects Full Disclosure Required By Consumer Protection Act”

  1. I bought a house last year for a million after negotiating the price. I had a down payment of R150 K. I did major renovations in the house, like tiling the entire house, did the entire ensuite bathroom, changed the whole kitchen and main bedroom wardrobes. Outside I renovated the patio and closed it. Further converted the garage into an extra room and did some landscape things in the garden.

    Now a couple of months later I’m just discovering that the house has bad mold. I have called so many people to attend to the problem but it appears there is nothing I can do if the house has mold and this was not disclosed to me.

    What recourse do I have? Especially with so much I have done to improve the house and the installments I’ve been paying the bank and still have to pay.

    1. Hi Zandi

      Mould is usually caused by rising damp in the walls. There are many different issues that can lead to rising damp and the most common of these is a missing or defective damp course. This is a water-proof barrier built into the foundations during the building process. It shields the rest of the construction that goes on top of it from any rising moisture coming from below. If the damp course is faulty or absent, rising damp can permeate the walls and eventually the problem of mould will raise it’s ugly head.

      Before you can paint over the mouldy areas you first need to treat the root cause of the problem or the mould will just keep coming back again. In practice there are many different ways to treat this problem and I suggest you have a professional contractor or damp specialist investigate and advise you.

      As to what recourse you may have, this will depend to what extent you can prove that the previous owner had prior knowlege of the mould problem, which is fairly likely, and then perhaps concealed it from you before the sale by painting over the mouldy areas. In that case the seller will not be able to claim protection under the voetstoots or “as is” clause and you may have a viable claim for compensation.

      Your first step might be to do some digging; speak to local contractors and repairmen; see if you can find anyone who was approached for advice by the previous owner. Ask for an assessment of the cost of solving the problem and a written estimate. Then you will need to approach an attorney for advice.

      Hopefully you can avoid litigation and your attorney can help you negotiate an amicable settlement with the seller.

      Best of luck.

  2. Hi there

    I have purchased a house, full title from an agent. I have received my 1st water bill and it is R10 000 and later found that there is an underground leak. The seller signed that she is unaware of any plumbing defects, but surely the leak wouldn’t have just started and waited for me to move in.

    How and who is responsible for the damages, who will have to pay the bill? Please help, spent all my savings on this house as it is my 1st purchase.

    1. Hi Kavishna

      A leaking underground pipe is most likely to be classified as a latent (hidden) defect. Your seller may look to the protection of the voetstoots or “as is” clause in the contract, which protects the seller from liability for hidden defects which could pop up later. However, this protection would not extend to a hidden defect that the seller might have known about before you signed.

      Perhaps you could approach the local authority and ask to see the water usage history of the property. This may give you some indication of when the leakage started. If historical records show that the leak started some time before transfer of ownership took place, you may have a viable claim against the seller. You should approach an attorney, in that case.

      Good luck.

  3. Good Day. Please HELP!!!

    We bought a house 09/2015 from speculators, who failed to disclose the defects and sold it Voetstoots. We have major roof leaks and foundation issues, to name a few. We also received a fake COC, which I have now rectified with the department of Labour and the electrician.

    We have tried the legal route but failed due to a lack of finance. We have approached the seller and agent, to no avail. The house was newly renovated prior to purchase and newly painted, so one could not have seen the rook leak water stains on ceiling.

    What can we do?

    1. Hi Diana

      The CPA covers for defects only if the Act applies to your transaction. You need to establish if your seller is a ‘supplier’ under the CPA, as discussed in the above article. A seller that is defined as a supplier may be liable for any defect that was not disclosed to the purchaser at the time of the sale. The seller’s disclosure is usually in the form of a written declaration which is included as an addendum to the Deed of Sale. It must be signed by both parties.

      If your contract contained a voetstoots or ‘as is’ clause, this might be an indication that that the CPA is not applicable to your transaction. In that case, any defects that were visible to you at the time of the sale are likely to be ‘patent’ (visible) defects that the seller is not liable for under the provisions of this clause.

      The voetstoots clause protects the seller from liability for any ‘latent’ (or hidden) defect that the seller didn’t know about at the time of the sale. You may need to do some digging for evidence that the seller knew about a hidden defect, and concealed this from you, in order to claim successfully for this type of hidden defect.

      If you think the seller has purposely concealed a defect in the property from you, and you can prove it, you will then have to consult with an attorney in order to seek compensation from the seller. Alternatively, you may be able to negotiate a compromise that’s acceptable to both parties.

  4. We purchased a house through estate agents and moved in after transfer.

    Two weeks later we had a plumbing issue; water flooding the house. Estate agents came and hired a Plumber to fix the issue and sent seller the bill. We also did not receive keys for the garage and two other rooms and cannot access them from outside.

    These concerns were raised with agents who referred it to the conveyancers. The seller has offered to pay the agents bill and says he is not liable for all other defects as his house was vacant for almost 10 months and had no knowledge of these issues. He also says the keys were probably lost through tenants and will not pay for the locksmith.

    What are our options?

    1. Hi Rumbi

      Your seller is probably liable for the plumbing repairs and the cost of a locksmith to open rooms that have no access.

      Without seeing your contract it’s difficult to comment. Take your documents to an attorney; not the conveyancer, who is acting in the interests of the seller. Let your attorney peruse the contract and give you an informed opinion.

      Often the mere act of getting an attorney involved will help get the other party more focused on their contractual obligations.

      Best of luck.

  5. HI!

    I would like to have some advise here on process to follow in order to complete the purchase of the house. I am trying to buy a repo house, but the problem that I am facing is the fact that the owners are still in the house even though it is said that they are illegal tenants. We were not allowed to view or inspect the house on the inside, only the outside view was allowed.

    So my fear is as followes: let’s say I do pay the deposit, what guarantees have I got in that those people will get out of the house? What role do agents/lawyers take after the fees have been paid in full to make sure that I move in without hastle?

    I tried to ask this questions but I did not get a proper answer, except that I must start the process in order for me to find out about my concerns.

    1. Hi Khaya

      Sometimes a repossessed property comes with illegal tenants. As mentioned in Top 10 Tips for Buying A Bank Repossessed Property under point #6, this automatically becomes the buyer’s problem and the costs of an eviction and relocation may become the purchaser’s liability after transfer of ownership.

      Consequently, you may find that neither the agent nor the transferring attorney will offer you any assistance whatsoever in this regard. It will be your problem.

      It may serve you well to exercise caution. Best consult with an attorney (not the transferring attorney, who is looking after the interests of the seller) in order to establish what it might cost you to have the tenants legally evicted. You could then take what may be a rather substantial expense into account by adjusting your offer accordingly.

      Good luck.

  6. I purchased a sectional title from the developer in June 2013. The property was already a year old at the time. By June 2015 the tiles in the lounge have cracked and 3 other owners are experiencing the same problem. Poor workmanship and cheap labor I guess.

    What rights do I have as the owner and can I get the developer to pay as the property is almost new?

    1. Hi Regina,

      With the purchase a sectional title unit, as the owner you automatically become a member of the Body Corporate. Perhaps you could get together with other members and ask your BC chairman (or chairwoman) to convene a special meeting to discover the extent of the problems you’ve described and discuss solutions.

      If the developer is at fault, you can address the issue in a united way, from a position of strength, and hopefully gain the developer’s cooperation. The objective should be to resolve matters amicably.

      Best of luck.

  7. We purchased a house and on the offer to purchase was a few things the owner needed to fix before we moved in. We moved in as all was transferred to our name and the bank advised that we should move in as any problems occurring while the house was in our name, we would be liable.

    Since then the roof, ceilings, gates, doors, window on the offer to purchase have not been completed. I have all email correspondence from them as well as the lawyers promising this would be done but have not heard from them since and I am being brushed off whenever trying to contact them.

    Please advise on what can be done regarding this as they keep promising to come and finish but never do.

    1. Hi Tracey,

      It sounds like you moved in before the previous owner could complete the “few things” you mentioned. It’s possible that you may have tacitly agreed to accept “as is” with the passing of risk on occupation.

      You may need to get a costing or estimate and then see if you can reach an amicable agreement with the seller directly.

      If you get nowhere, it may be time to see an attorney. Or you might decide to write it off to school fees and move on.

      Good luck.

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