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BUSINESS NEWS - In terms of South African common law, when immovable property is sold there is an implied warranty against defects associated with the property.
In order to dispense with this warranty, the seller may include a “voetstoots clause” in the sale agreement, which stipulates that the immovable property is sold “as is”, along with any existing defects, whether they are obvious or hidden.
If the seller was aware of a defect and failed to disclose it, the voetstoots clause cannot be relied on and the purchaser may have grounds to pursue a claim for fraudulent misrepresentation by the seller.
In a recent court case, the seller sold a property while aware of a latent defect, which the purchasers later repaired at their own expense.
The purchasers subsequently instituted a claim for damages on the basis of fraudulent misrepresentation by the seller. The court ruled in their favour, finding that while the voetstoots clause is intended to protect the seller, it does not apply in this case, due to the seller’s concealment of the defects.
The Property Practitioners Act 22 of 2019 promotes transparency in such transactions by stipulating that an immovable property condition report must be completed by the seller.
Disclosing the property condition and defects in a condition report does not mean that the seller is liable to repair any defects, unless he expressly agrees thereto.
By disclosing any defects upfront, the seller reinforces the agreement to sell the property voetstoots as per the sale agreement, thus reducing the risk of future disputes and potential liability.
Contact us to learn how to safeguard your legal position in the sale of an immovable property:
Tonkin Clacey Inc. Mossel Bay
044 220 0240 | 083 600 4903
jaco@tcinc.co.za | www.tcinc.co.za
Office 4, Nautilus Place
27 Marsh Street,
Mossel Bay
