In South African law, the voetstoots clause is a standard provision in the sales agreement of immovable property designed to protect the seller against claims for damages discovered after the transaction has taken place. Essentially, the clause stipulates that the buyer purchases the property from the seller in its existing condition, including any patent or latent defects. Patent defects are those that are clearly visible on inspection of the property or understood to be defects (for example, cracks in the walls or windows), whereas latent defects are not as easily discoverable and often go undetected during reasonable inspection of the property (for example, roof leaks that only become obvious after a storm).
Determining who is responsible for the repairs of both patent and latent defects is often a cause for contention between buyers and sellers and may lead to lengthy, costly legal disputes down the line. For example, where the sale has transferred and defects are then discovered by the buyer on occupation of the property.
The buyer is responsible for identifying patent defects during a full and proper inspection of the property, prior to signing the offer to purchase. Patent defects do not require a professional inspection to be carried out or the appointment of inspection experts – however, it is crucial that buyers perform a rigorous home inspection before entering into the sales agreement to ensure they are fully aware of the condition of the property and any necessary repairs. Due to the nature of patent defects, the buyer will have no recourse against these types of defects following the transfer of the property. On the other hand, although latent defects may be hidden or dormant, they are not always completely undetectable if the buyer knows what to look for.
Both patent and latent defects should be listed in the Property Condition Disclosure Document issued by the Estate Agency Affairs Board, as part of the offer to purchase. Reputable estate agents will recommend that the disclosure document be included in the sales agreement because it offers both parties a measure of protection, provided it is completed correctly and comprehensively. The buyer must ensure that the seller’s disclosure is satisfactory and that further due diligence is undertaken if the seller’s responses are deemed incomplete/unsatisfactory. If defects are present, the document should stipulate who is responsible for the repairs to avoid costly legal disputes or delays to transfer. In most cases, if new defects of any nature are discovered before transfer has taken place, the onus falls on the seller to rectify the issues.
There are, however, certain instances where the voetstoots clause may not be raised as a defense, according to South African case law and legislation. Regardless of whether defects are patent or latent, the seller is required by law to disclose any defects they’re aware of in the disclosure document, verifying that those items listed constitute a full and honest disclosure. Whilst the voetstoots clause protects the seller from claims for damages unknown to him, common law states that the seller is responsible for the repair and/or maintenance of all known latent defects for three years from date of discovery.
The difficulty for buyers comes in proving that the seller was aware of a latent defect and deliberately failed to disclose it before property transaction. If the buyer can prove that the seller deliberately concealed the defect, the voetstoots clause cannot be used to protect the seller against claims for damages and such damages will be for the seller’s account. However, proving this can be both difficult and costly – especially if problems arise after the sale has been concluded.
How does the Consumer Protection Act affect the Voetstoots clause?
The implementation of the Consumer Protection Act (CPA) in 2011 has in no way nullified the voetstoots clause. The voetstoots clause applies to property transactions where the seller’s ordinary course of business is not property-related, for example, an individual selling his/her own home or apartment. Here, the transaction is considered to take place between two consumers (the buyer and the seller). The CPA will typically apply to transactions between buyers and developers, builders, or investors whose ordinary course of business is buying and selling property.
Reputable real estate professionals like Etchells & Young are committed to educating, advising and guiding both buyers and sellers throughout the sales process, with the interests of both parties in mind.