Buyers and sellers of property in community schemes should ensure they are aware and informed as to their responsibilities and obligations when it comes to the disclosure of any defects associated with the property. Often sellers rely on a “voetstoots” clause in their sale agreement to absolve them of liability for any later defect that may become apparent following the sale of the property
The term ‘voetstoots’ commonly used in a sale agreement usually means that any problems with the home’s structure, visible (patent) or not (latent) defects are the buyer’s problem – not the sellers. The “’voetstoots’ clause will not however protect the seller from future liability for such defects, should it be found that the seller covered over the defect cosmetically, or chose not to disclose the defect.
Since the establishment of the Property Practitioners Regulatory Authority (PPRA) in 2022, every property sale agreement or for that matter, a lease agreement, requires a mandatory disclosure form to be provided to the seller by the property practitioner handling the sale of the property prior to the appointment of the practitioner. This disclosure document is to be filled out by and signed by the seller in which the seller must declare any defects of which they may be aware. This found in Section 67 of the Property Practitioner Act 22.
If no disclosure form is signed and attached to the Sale Agreement, the Act provides that the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser. A property practitioner who fails to comply with the requirement of the mandatory disclosure form may be held liable by an affected consumer should a defect become apparent that should have been disclosed to the purchaser of the property.
This form gives the seller the opportunity to disclose any defects or issues with the property that they know about. Failure by the seller to disclose known defects associated with a property could be construed as a fraudulent act. The potential homebuyer should be provided with the disclosures before signing the offer to purchase and it must be attached to the sale agreement and form part of the agreement, so that all parties are covered should a defect arise at a later date.
A property practitioner who fails to comply may be held liable by an affected consumer, as it is clearly stated in section 67(1)(a) that the property practitioner must not accept a mandate unless they have received the duly completed and signed disclosure form. However, it is the seller who would be liable if the disclosure form has been incorrectly filled in or known defects not recorded.
Prior to transfer being passed, every home must receive electrical (and in some parts of the country, a plumbing compliance certificates as well as electric fencing and gas certificates if applicable) prior to transfer. These certificates are meant to offer buyers peace of mind, but buyers should be aware that even these are not necessarily fool proof.
A latent defect is a material defect that was not visible after a reasonable inspection has been undertaken. It is a defect that arise after the inspection and could not have been foreseen. Examples of latent defects can include leaking roofs, faulty or burst geysers, and damp issues where you can’t see the issue on inspection.
Buyers should remain vigilant and not be afraid to point out issues about which they are concerned or that they would require to be repaired as they discover them in a property.
Should it arise that a seller failed to disclose a defect or that they hid it from view (such as painting over damp ingress), a buyer does have the option of making a claim against the seller, so long as it is made within three years from date of the defect being discovered. The problem can be proving that the seller was aware of the defect or should have been aware of it and deliberately concealed the defect. Taking a matter to court can be very expensive even if awarded costs as these don’t usually cover the actual costs expended in pursuing the case.
The best course of action for a buyer is to carefully inspect the property oneself or engage a professional certified home inspection companies who will, for an agreed price, inspect a home and prepare a report of any patent and possible latent defects. This report can be included as part of the offer to purchase from the prospective buyer where the identified defects should be repaired properly and adequately by the Seller prior to occupation or transfer of the property.
The Sale agreement should also have a clause that deals with now any later dispute that may arise due to latent defects found in the home before or after registration of transfer, will be dealt with. This could include the matter being adjudicated by a professional party such as an architect or structural engineer as agreed to by both parties as an internal remedy, or if no agreement can still be reached then the matter would be referred for arbitration. This is preferable to a court process, where one should always weigh up the costs involved in getting the defect repaired oneself against the cost of such necessary court action, which can be a long and drawn-out process.
Whitfields will provide support in whatever way it can, in assisting scheme executives and residents residing in the community schemes that we manage, along this road of compliance with legislation governing peaceful dispute resolution in the community schemes we manage.
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