Protections against property defects
Defects are one of the leading causes of disputes during real estate transactions. There are, however, a few protections in place to help sellers and buyers in these kinds of situations.
Have you recently bought your dream house, only to discover a defect that was hidden from you? Perhaps you have recently sold and must defend yourself against the buyer’s unjustified claims of damages. Thankfully, there are a few protections in place to help sellers and buyers who find themselves in these kinds of situations.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, explained that defects are one of the leading causes of disputes during real estate transactions.
Complaints often arise over who is responsible to fix the issues. The problem is that too few people are aware of what legal protections they have when it comes to these matters,” he noted.
Goslett admitted that these sorts of issues can become complicated; but, in general, the seller of a property has the responsibility to disclose to the buyer any known defects in the property at the time of finalising and signing the offer to purchase.
“If a flaw is discovered after the property has been sold, the onus will be on the buyer to demonstrate that the seller had known about the flaw and purposefully or fraudulently concealed it from the buyer during the closing. The responsibility cannot fall on the real estate practitioner unless the seller told the agent and the agent did not disclose the information to the buyer or purposefully hid the information from the buyer,” Goslett clarified.
To assist in protecting all parties involved, the newly introduced Property Practitioners Act 22 of 2019 (Act) enforced a new property defects disclosure form to be provided by the seller to the buyer before an Offer to Purchase can be signed.
According to Section 67 of the Act:
A property practitioner who fails to comply […] may be held liable by an affected consumer. […] Nothing in this section prevents a consumer, for his or her account, from undertaking a property inspection to confirm the state of the property before finalising the transaction.”
This defects disclosure form is not to be confused with the inspections that need to happen to issue the necessary compliance certificates. This form merely acts as a way for sellers to disclose a list of any known defects to the buyer. This can be useful to demonstrate which defects were explicitly communicated to the buyer.
“If the problems are noted, the seller will have good evidence to support the claim that the buyer knew about the defects and is not entitled to damages for concealment. It is also a good idea to list any flaws that the seller will fix before the buyer moves in as a way to safeguard the buyer from a seller who tries to invoke the voetstoots clause after the transaction has been completed or later retracts their assurance to fix the flaw,” Goslett suggested.
Explaining what he means by “voetstoots”, Goslett explained that, in the simplest terms, it signifies that the buyer purchases the property “as is”. The voetstoots clause, however, will not shield a seller from responsibility if the seller knew about the defect and purposefully kept it from the buyer. It also cannot protect the seller if it was agreed to in the sales agreement that the seller would fix the issue on their account.
As a final word of advice, Goslett recommended hiring an independent property inspector to verify that the house you buy is in excellent condition.
