There are also various versions of “Sellers Property Condition Disclosure” statements in use by estate agents. The Estate Agency Affairs Board (EAAB) prepared one of the disclosure forms. Another by a prominent firm of conveyancing attorneys. Some “Offer To Purchase” contracts include the seller’s disclosure towards the back of the contract. None do much to make the average property transaction any fairer for the buyer.
These disclosure statements often don’t provide the buyer with genuinely comprehensive information on the true condition of the property. Such agreements often simply shift responsibility away from the estate agent and onto the seller.
Estate agents use these disclosure statements to get the seller to disclose, to the best of his belief and knowledge, problems in the house for sale. However, what the seller “believes” and what is actually true are sometimes very different. The average seller (or agent) is not qualified to evaluate the true physical condition of the house. In all probability neither has likely never climbed into or onto the roof.
More than 40% of houses inspected in South Africa have faulty, and often unsafe, hot water geyser installations. Often the roof covering or roof structure is deteriorating. Sometimes the foundations are subsiding because of poor groundwater management, trees or unstable soils. The cracks which the seller has filled and painted over often open up again after the buyer moves in. There are numerous causes for damp as there are for wall and slab cracks. All of these problems require a trained, objective eye to evaluate them. The seller is sometimes is not even aware of the problem or potential problem.
The Consumer Protection Act
Seller’s disclosures mostly are attempts to help estate agents escape the potential wrath of the Consumer Commissioner. Estate agents are liable under the CPA for the information they supply buyers. Furthermore, the seller continues to take refuge behind the voetstoots clause.
This shameful situation continues to exist in the second hand South African house market. As a result, the agent is protected by the seller’s disclosure. The private seller is protected by the voetstoots clause and the buyer is left unprotected.
More than 77 % of seller’s houses are now professionally inspected pre-sale in the United States and Canada. In South Africa, the figure is less than 1 %. As a result, the South African home buyer is an unprotected consumer – unaware of his predicament.
Home inspections pre-sale are really the only solution. Industry professionals, mortgage lenders (banks) and lawmakers need to make this standard practice.
Finally, if you’ve had a bad experience with a seller’s disclosure or have bought property without a disclosure, please comment or post!