The Consumer Protection Act and the Voetstoots clause: doubt still exists as to when these apply.
Category News
In South Africa’s property sector considerable misunderstanding still surrounds the difference between the Voetstoots clause and the
Consumer Protection Act when a property is sold.
“Some people have picked up the idea that since the introduction of the CPA the cost of repairs due to defects discovered in the home
after the sale can be charged to the seller,” says Rowan Alexander, Director of Alexander Swart Property. “However, this applies only in
certain exceptional circumstances.”
To understand the current situation, says Alexander, it is necessary firstly to recognise the difference between patent and latent defects.
Patent defects are those that can be easily seen when inspecting a home. Latent defects are those which are in a sense “hidden” and might
not be recognised even by a person familiar with property and home inspections.
Previously, when the buyer signed a deed of sale subject to the voetstoots clause he agreed to accept the home “as it is” i.e. with all its
patent and latent defects.
Nevertheless, if it could later be proved that the seller knew of a defect in the home but did not disclose it to the buyer, the buyer
wasentitled to claim compensation or even to cancel the sale.
In most cases, however, says Alexander, a sale agreement with a voetstoots clause overruled the buyer’s right to claim for defects
discovered after the sale.
When the Consumer Protection Act became a reality, the buyer was put in a position to claim compensation whether or not the seller knew of
the defects in his home if it was sold by him “in the ordinary course of business” i.e as part of the seller’s recognised income earning
activities. The new ruling does not apply to the “private” seller who is selling his primary residence or a investment home but is not a
property speculator in the normal sense of the word.
Since the introduction of the Consumer Protection Act, however, property developers, builders or investors, including the growing numbers
of buy-to-let investors have been unable to invoke the Voetstoots clause and can be held responsible for defects in the property
discovered after the sale.
“The best advice that I can give to property sellers of second hand homes,” says Alexander “is to list every single defect of which they
are aware in the property. The buyer will then be put in a position where he can later have no claim on the seller for withholding
information.The buyer should employ a qualified building inspector to check on the condition of the home before he signs the sale
agreement. If the home is sold by someone as part of his or her business\money making activities, it is expected to be without defects of
any kind and faults discovered later have to be remedied by the seller or compensated for unless it can be shown that they are the result
of negligence on the part of the owner or due to normal wear and tear.”
Author: Independent Author
