Scenario: Sally buys her dream home and is elated with her purchase. After she moves in, she notices that there are a number of electrical problems, the pool pump doesn’t work and the roof leaks after the first rain.
She looks back at the agreement from the estate agent and sees that there is a “voetstoots” clause in the agreement. What does this mean? In simple terms, voetstoots means selling or purchasing property without a guarantee or warranty.
Since the introduction of the Consumer Protection Act (CPA), there has been much debate and confusion as to whether the voetstoots (as is) clause may still be used in property sales or whether this is now overridden by the CPA.
The general school of thought is that the voetstoots clause may not be used in contracts where the transaction falls under the CPA. In general, the CPA applies when transactions take place and goods and services are promoted, advertised or supplied in the ordinary course of business, and for consideration.
For example, a property company who is in the business of buying and selling property will not be able to include a voetstoots clause into any of their sale agreements. On the contrary where a company that is not in the business of buying and selling property acquires and then later disposes of that property, they may include a voetstoots clause.
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In accordance with section 48 of the CPA, the voetstoots clause is deemed to be “unfair, unreasonable and unjust”.
It is for this reason that the inclusion of the voetstoots clause in an agreement that falls within the CPA is considered a violation of a consumer’s rights. Property sellers continue to be at liberty to sell goods (and properties) within a specified condition, provided that the condition of such goods must be disclosed and pointed out to the buyer in the sale agreement.
Property sellers and developers cannot escape the liability for patent and/or latent defects. Patent defects are those that can be seen with the naked eye and are easily identified. Latent defects are hidden and not easily identified, but are often only visible or discoverable upon inspection.
Private sales generally do not fall within the ambit of the CPA as the parties thereto do not sell or buy property within the ordinary scope of their business. Accordingly, the common law position will apply and the voetstoots clause may be included in the sale agreement.
The advantage for the seller of course is that they won’t have to carry any liability or risk for the defects. However, the seller will be held liable in the event they had intentionally made a misrepresentation of any of the features of the property or if the seller did know about a latent defect and failed to disclose it.
Private sellers are advised to include a provision in the sale agreement to allow buyers an opportunity to inspect the property or have an expert inspect the property prior to purchase.
(Article: Diane Charles, info@tuckers.co.za).
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