When home hunting, most home buyers tend to be so excited that they give no thought to a closer inspection. Before you know you have signed the agreement and the property is yours. But what about all those defects you didn’t see during your first or even second visit.
Although it’s the law that home sellers have to disclose defects, it’s amazing what a coat of paint will hide. You will only start noticing problems six months down the line – when it’s too late for recourse.
Buyers who only complain of defects some months after the transfer has taken place occasionally exasperate sellers and Estate Agents.
There are two issues here. Firstly the discovery of defects that only appear later. For example, a Buyer may only experience a major roof leak when the first summer rains appear long after registration. If the Seller consciously failed to disclose it, the Buyer can sue him for his repair costs.
The second issue concerns a delayed discovery of defects by the Buyer. For example, he may only first complain about a wall crack six months after taking occupation. It will be difficult to prove that the Seller knew about a defect or that the defect existed at the time of the sale. In such cases, the Buyer will have no recourse against the Seller.
Every residential sale agreement will contain a voetstoots clause freeing the Seller from any liability for patent and latent defects. It is important to know what the effect of such a clause is and how it protects the Seller.
The meaning of the voetstoots clause
The voetstoots clause describes the action of buying something “as is”. That means in whatever condition it is – warts and all. It is used for all second-hand property sales where the property has deteriorated through normal wear and tear. The property may be defective as a result of its constant use or through natural decay over time.
Its purpose is to shield the Seller from any action by the Buyer, for defects which may jeopardize the sale.
Patent and Latent defects
A voetstoots clause at face value discharges a Seller from liability for all patent and latent defects. It is important to explain the distinction between these two different types of defects.
Patent Defects are flaws that will be clearly visible on a normal inspection of a property. They include wall cracks, sagging gutters, broken windows, missing tiles and the like. It is a Buyer’s duty to acquaint himself with the condition of a property on purchasing it. Therefore, he cannot later claim he did not see such defects. As a result, the test is what could have been seen on the original inspection of the property.
Faults hidden from view or not easily noticeable are latent defects. These include faulty pool pumps and geysers, rusted internal pipes, leaking roofs except where strain marks make the leak obvious. This also includes concealed defects such as dampness behind a cabinet. The test is what an inspection could not normally reveal.
A voetstoots clause completely liberates a Seller from any liability for patent defects. This exemption is not absolute in the case of latent defects, however.
The seller’s responsibility
A Seller is not liable for latent defects where he was not aware of the problem. If a Seller conceals a latent defect he will be liable to the Buyer for the cost of its repair. He cannot rely on any clause in the original contract making no warranties as to the condition of the property.
A Seller will thus be liable for all cracks or dampness and other similar faults deliberately hidden from view. He is also responsible for latent defects such as an appliance, which was not functioning properly. Examples are geysers delivering only lukewarm water, defective electrical points, and the like.
The Buyer’s recourse
It is very important for a Buyer to know what his rights are in such cases. By law he cannot do any of the following:
He cannot deduct the cost of repairs from the purchase price and tender a lesser amount or reduce his deposit;
A buyer cannot refuse to pay occupational rental unless the defective article seriously restricts occupation of the property;
He cannot repudiate or cancel the sale contract.
It is the Buyer who will be in breach of contract if he takes any of these actions. By law, his proper recourse is to institute an action for damages and sue the Seller. This will obviously not appeal to the Buyer. Therefore, the best way is to ask the conveyancer doing the transfer to settle the matter amicably with the Seller. Ideally, he should arrange a refund of the costs of repair to the Buyer on registration of transfer. It is in the best interests of both parties to agree to this.
Warranties and Misrepresentations
Many Buyers think that a deliberate non-disclosure of latent defects constitutes a fraudulent misrepresentation on the Seller’s part. They believe that they can cancel their contract. This illusion is quite common. The contract can be repudiated as the failure to disclose known latent defects without a voetstoots clause. Furthermore, this would constitute a deliberate contractual misrepresentation on the Seller’s part.
The inclusion of a voetstoots clause overrules any question of contractual misrepresentation by the Seller. The Buyer cannot cancel the sale on the grounds that the property is worth less than the price offered. He has purchased it as is, defects and all. Secondly, his rights are confined to an action for damages. The non-disclosure is only regarded as a delictual misrepresentation.
For instance, the Seller may guarantee the condition of an item or state that it is working properly. If false, the Buyer can refuse to take transfer until the defects are properly repaired at the Seller’s expense. Alternatively, the Buyer can sue for a reduction in the purchase price, an action known as actio quantum minoris.
Other issues affecting defects
There are two other important issues that often affect sales of immovable property.
Defects caused after a sale
Who is responsible for damage to a property before transfer but after a signed sale contract? For example, a negligent motorist might smash the front wall of the property or a geyser might suddenly burst, flooding the house and damaging its fitted carpets. Responsibility will lie as follows:
Firstly, on the Seller, if the contract makes him liable for the risk in the property until the registration of transfer;
On the Buyer, if the risk falls on him from date of sale or occupation. This occurs mostly in terms-sale contracts where the transfer is delayed for more than a year;
On the Buyer, if he causes the damage while in occupation. He will be liable if he uncovers a latent defect, such as breaking a rusted pipe under a sink when trying to fit his washing-machine connection to it.
Estate Agent’s Responsibility
Many Buyers want to hold their Estate Agents liable for latent defects. This is particularly the case when the Seller can no longer be traced. An Estate Agent only inspects the property for obvious patent defects. The agent must enquire from a Seller as to what known latent defects exist. Before the buyer signs the contract the agent should disclose the defects.
Once having done this the Buyer’s recourse is against the Seller alone.