Many sellers (and buyers) find themselves in murky waters around understanding their rights and obligations in the property market. When it comes to selling your property, there are certain disclosures you are obliged to make, even with voetstoots, failing which, you could be accused of misrepresentation and face a claim for damages from a disgruntled purchaser.
“The Consumer Protection Act (CPA) is pivotal in protecting buyers’ interests”, says Kayley Leverton, Senior Associate: Conveyancing, Commercial Law and Litigation at Gillan & Veldhuizen Inc.. Under the CPA, sellers are obligated to disclose all known defects in the property, even latent ones.
Voetstoots clauses are often included in sale agreements, meaning the property is sold “as is” or “as it stands” and the seller gives no warranties or guarantees as to its condition. This indicates that the buyer accepts the property in its current condition, flaws and all, with no further liabilities on the seller’s part.
It must be noted that a voetstoots clause does not protect a seller who deliberately fails to disclose the defect with the aim to induce a purchaser to conclude the sale. “A seller cannot hide behind the voetstoots clause where she/he has concealed or fraudulently misrepresented a defect,” explains Leverton.
It is entirely understandable that some homeowners may have property defects of which they are unaware. It could be issues with the foundations or plumbing which, as a lay person, one cannot expect the seller to know about; referred to as latent defects. Visible defects on a reasonable inspection are patent defects – this could be, for example, a damaged wall or broken window which is noticeable on a customary observation.
There is good news for purchasers too. Leverton notes, “The Property Practitioners Act now mandates that a disclosure form must be completed when a property practitioner sells a property on behalf of a seller.” This provides potential buyers with valuable information about the property’s condition. Furthermore, if the CPA is applicable, voetstoots clauses are prohibited where the supplier sells the property in its ordinary course of business (i.e. a developer) so this provides some comfort to a purchaser.
It must be stressed that a seller should always disclose defects, especially known latent defects, to a potential purchaser as failure to do so could be met with a claim for damages for misrepresentation or fraudulent non-disclosure despite there being a voetstoots clause.
