Is The Property Seller Who Knowingly Kept Quiet About A Defect Protected By The Voetstoots Clause ?
“I recently bought a beach house at the coast and we had our first stay there this long weekend. Much to my dismay, we discovered that rainwater leaked extensively through the roof into the house."
"I asked a local builder to fix the problem, but he advised me that this was not just a quick patch job but would be pricey given major structural problems with the roof and an inadequate roof pitch."
"The seller never mentioned anything of these problems and I only became aware of this when it started to rain. What can I do?”
Implied warranty against defects
In terms of our common law when an item is sold, there is an implied warranty against defects in that item.
However, the seller of the item is able to dispose of this warranty by stating that the item is sold “voetstoots,” or loosely translated, ‘as is’ no matter what the condition of the item.
Generally contracts for the sale of property will contain a voetstoots clause which allows a seller to be freed from the liability for both patent (obvious) and latent (hidden) defects of which a purchaser becomes aware after taking occupation of the property.
Latent and patent defects in property law
A patent defect is typically a flaw which is apparent on a normal inspection of the property. This would include things like wall cracks, broken fittings etc.
A latent defect on the other hand differs in that the flaw is not obvious and generally hidden from your view and not visible on a reasonable viewing of the property.
Leaking pipes behind a wall, rising damp and structural issues with a beach house roof are good examples of latent defects.
Let’s assume for the moment that your sale agreement does contain a voetstoots clause. One must now consider whether you are bound to the voetstoots clause and or eligible for the protection afforded by the Consumer Protection Act (“CPA”).
The Consumer Protection Act and the Voetstoots Clause
The CPA (if applicable) allows for consumers to receive their bought goods free from defects, effectively nullifying any voetstoots clause.
However, this protection is only afforded where the seller is not a typical once-off private seller, but a developer, speculator, or investor with a property portfolio who falls under the definition of a ‘supplier’ (as defined by the CPA) and which acted in the ordinary course of his business when the property was sold to you.
In such a case you will have the protection of the CPA and the voetstoots clause will be nullified.
If however you bought the property from a private seller in a once-off transaction, the CPA will not apply and the voestoots clause will remain applicable.
One should however keep in mind that a voetstoots clause will not protect a seller where he failed to disclose a defect in bad faith or fraudulently.
It is trite law in South Africa that a seller shall only be excused from liability for latent defects where he himself was not aware of the flaw at the time of the sale and the seller thus has a duty to disclose any latent defects of which he is aware, failing which the seller also cannot rely on a valid voetstoots clause.
Equally, the purchaser has a reasonable duty to inspect the property and to satisfy himself as to the condition thereof.
Duty to disclose
For a purchaser to succeed with a claim in spite of a valid voetstoots clause, the purchaser must prove that the seller was aware of the latent defect at the time of the conclusion of a contract of sale and deliberately concealed the defect when he had a duty to disclose and failed to do so.
Should the purchaser successfully prove the above mentioned he may either a) claim damages, b) if the defect is serous, cancel the sale and claim repayment of the purchase price and interest thereon, or c) claim a price reduction.
If a voetstoots clause is however omitted from a contract of sale, the common law will prevail which provides an implied warranty to the purchaser.
In terms of the Prescription Act, a purchaser has a period of three years from the date of becoming aware of the defect to hold the seller liable.
Where the CPA applies a purchaser is granted a minimum of six months, which could be longer depending on the circumstances.
From the above, it is clear that factors such as the existence or not of a voetstoots clause, whether the CPA applies, whether defects where patent or latent, whether you or the seller were aware of the defects, whether the defects were disclosed or not etc. all need to be considered in determining the correct plan of action.
Our recommendation is therefore to consult with an attorney to consider the above factors and obtain legal advice as to your available remedies.