Estate Agents and Property Inspections

When Estate Agents Should Insist On An Independent Inspection

independent inspection
An independent inspection and report protects both the estate agent and the seller

The EAAB (Estate Agents Affairs Board) encourages buyers to have a home inspection. However, which buyer ever reads the articles on the EAAB’s website? Maybe estate agents read the articles and the EAAB encourages estate agents to advise buyers to have an independent property inspection?

Most estate agents prefer not to have an independent property inspection, mostly because of concerns over defects that may make the sale fall through and because of the cost involved.

Estate agents should know better! Insisting on an independent property inspection may save the agent from strained relationships with both sellers and buyers. Furthermore, an independent inspection will prevent damage to their reputation or possibly even costly liability later on, should problems occur with the condition of the property.

An independent home or property inspection doesn’t kill a deal by forcing sellers to disclose defects that they wouldn’t otherwise have known about. Any defect that is serious enough to kill a real estate transaction is best discovered before it can kill the deal or result in litigation at a later stage.

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Consumers and the Property Practitioners Bill

Has the Property Practitioners Bill missed the point?

consumers

Are consumers offered more protection?

Parliament passed the new Property Practitioners Bill on Tuesday 4th December 2018. This bill has been on the cards before 2011!

The Bill was supposed to finally provide buyers (consumers) more protection in the secondary housing market.

However, it appears the Minister of Human Settlements and his staff and the National Assembly totally missed the point!

Here is that portion of the Bill:

CHAPTER 10

CONSUMER PROTECTION

Mandatory disclosure form

  1. A property practitioner –
    1. may not accept a mandate unless the seller or lessor of the property has provided him or her with a fully completed and signed mandatory disclosure in the prescribed form; and
    2. must provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property.
  2. The completed mandatory disclosure form signed by all relevant parties must be attached to any agreement for the sale or lease of property and forms an integral part of that agreement, but if such a disclosure form was not completed, signed or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.
  3. A property practitioner who fails to comply with subsection (1) may be held liable by any affected consumer.
  4. Nothing in this section prevents the Authority from taking action against a property practitioner or imposing an appropriate sanction.
  5. Nothing in this section prevents a consumer, for his or her own account, from undertaking a private property inspection to confirm the state of the property before finalising the transaction.

This is the protection this Bill offers to buyers (consumers) who buy properties from sellers.

So what has changed? Continue reading “Consumers and the Property Practitioners Bill”

Snag Inspection and Report

New Homeowners Should Have a Professional Snag Inspection

 

snag inspection

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Do you believe that you are protected by buying from a reputable developer or builder? Will you be able to identify all the snags without a professional snag inspection?

What buyers don’t realise is that other building contractors sub-contract to the developer or builder. Both the developer and builders are under pressure to complete the units or homes within a contractual timeframe. Often, the builders take shortcuts resulting in best building practices falling by the wayside.

In addition, most new homebuyers believe the NHBRC, bank and municipal building inspectors provide them with this sort of protection.

This is not the case!

Inspectors duties

Bank inspectors

Your bank inspector determines the market value of property, land, and improvements for the bank. Therefore, he is not concerned with the state of the property unless it affects the value of the property.

Municipal Building Inspectors

The municipal building inspector checks your building to ensure it complies with approved construction drawings, local bylaws and zoning regulations. In addition, he or she is also responsible for ensuring compliance with local and national building regulations.

Engineers

Structural engineers inspect and evaluate the structures of your home only. This is the foundations, slabs, walls and roof.  They are not concerned with the installations and finishes which make up more than half the value of your house.

NHBRC inspectors

NHBRC inspectors inspect all new homes to check that the builder is complying with the NHBRC requirements on site

The NHBRC Warranty Fund covers you against major and defined structural defects for up to five years. Enrolling your new home with the NHBRC is a statutory requirement. Theoretically, this affords you protection against contractors who deliver substandard design, workmanship and poor quality materials.

As a new homeowner, you have the right to instruct your developer or builder to rectify shoddy and defective work. This includes non-compliance or deviation from the terms, plans and specifications of your building agreement with him.

However, the required NHBRC inspections are seldom all done. Continue reading “Snag Inspection and Report”

A Smelly Shower

Smells in your shower

shower

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Often what happens in a shower, while the tiler is tiling the floor, is that excess tile adhesive and grout is washed down the shower drain. As a result, some of this grout may be lodged somewhere in the drainage system causing a blockage.

The following may have happened:

  • Either the trap or drainage pipes were damaged during an attempt to unblock the drain.
  • Grout is lodged in the trap and drain pipes.
  • The stub stack vent valve may be below the level of the highest plumbing fixtures on the drainage system in the bathroom.  As a result, the lowest fixture, such as the shower P-trap water seal may be syphoned out of the shower trap.

Of course, a combination of all three may occur as well. Unless the shower trap or drain pipes are damaged, you should be able to handle the cleanup yourself.

Mould in the P-trap

If your shower drain smells musty, you most likely have active mould growing underneath the drain cover. But, if your drain smells like rotten eggs or sewage, you’re either smelling bacteria from a clogged or dirty drain or sewer gases that have escaped from your drainage pipes.

As part of their metabolic process, active mould spores release a gas that has a distinct musty smell. In addition, the gas can be dangerous. If inhaled, it can cause headaches, nausea, dizziness and fatigue. Continue reading “A Smelly Shower”

Home Warranty

Is a Home Warranty worth the money you pay?

home warranty against defects

A new way to “protect” home buyers and enrich insurance companies is available in South Africa in the form of a “home warranty” which will protect home buyers against future defects for a period of 2 years!

The “Voetstoots Clause”

Thousands of homes are sold without any guarantee that the homes are free of defects. These homes are all older homes sold with the “voetstoots” clause in the “offer to purchase”. The Consumer Protection Act does not protect you, the buyer, in this case. Selling his home is not the seller’s normal course of business.

The seller’s disclosure is required to declare all known defects. Can you trust that document?

I would not!

You have to prove that the seller was aware of the defects and did not disclose them!

The defects could be maintenance issues or latent defects that the seller knows about, but that is hidden from view. Such defects can cost a lot of money to fix. Furthermore, the legal process is expensive and frustrating if there’s any doubt that the seller did not disclose known defects.

About the home warranty

An insurance company is offering a “home warranty” to protect you from issues and defects for a two year period. In addition, the premiums are determined on an individual basis according to the insurer. However, the cost of this home warranty apparently ranges from R12,000 for a one million Rand home to R28,000.00 for a five million Rand home!

The seller can include the cover as a feature of the sale, or the buyer may insist upon the home warranty as a condition of the sale. In both cases, payment for the warranty forms part of the offer to purchase.

There are costs like certificates of compliance, levies and rates clearances, bond cancellation fees and the estate agent’s commission on the sale that all come off the selling price. Then there are the costs the seller has of buying a new property and moving to it as well!

I can only wonder how many sellers will want to cough up such a large amount of money?

Which leaves you, the buyer, to protect yourself by buying into the home warranty!

But what does the “home warranty” work and protect you against?

Apparently, the key benefits of the home warranty are a cover against:

  • Roof, structure or workmanship defects.
  • Defects with foundation design, structure or workmanship.
  • Faulty electrics, plumbing, drainage, sewerage and gas installations.

If you will have a bond on the property you want to buy, your bank will insist you have a homeowner’s insurance. Furthermore, except for the foundation and structure, a homeowners insurance will cover most of the defects mentioned above. This includes flood water or storm damage to the structure.

In addition, the insurer’s home warranty includes a property inspection beforehand!

Why buy a home warranty?

A home warranty will provide a professional inspection report that lists any exclusions or defects so you know what you are dealing with when it comes to negotiation time.

Continue reading “Home Warranty”