The buyer takes the property “as is”, regardless of condition or whether there are defects not previously noticed.
Property buyers who sign offers to purchase before noticing defects often find themselves at the unlucky end of the “voetstoots clause” used by sellers as a disclaimer against buyers’ claims.
Most property sales agreements in South Africa include this clause, which means the buyer takes the property “as is”, regardless of condition or whether there are defects not previously noticed.
While all buyers face this hazard, those who purchase properties remotely, without seeing them physically or sending someone to view the property, are at greater risk.
This does not mean, however, that sellers are completely protected. Rene Barry, partner at law firm Henkes Nolte-Joubert, says known defects must be disclosed to all parties. If a seller sells a property without doing so, a buyer may be able to cancel the agreement. This means that while the clause protects sellers, it cannot be abused.
“Whether patent or latent, if the seller knows about defects, he cannot use the voetstoots clause to protect himself against repairing them or not disclosing them to the buyer.”
It is always recommended that buyers ask for full condition reports for properties.
“If a report is not available, the buyer could request that an inspection be carried out. While this would be at his expense, it would be worthwhile if there are questions that cannot be answered fully by the seller or agent,” she says.
Barry says a buyer can cancel the deal with no repercussions if it is found the property had a defect known at the time of sale, but not disclosed.
“If the seller conceals something he knows about to achieve a better price, the buyer is within his rights to cancel or sue for damages.”
Similarly, if additions or alterations have been made to a property without the necessary building plans being approved, Rawson Property Group’s Wayne Albutt says the voetstoots clause may not protect a seller who was aware of this.
“If it can be proven in a court of law that the seller was aware of the irregularities, the purchaser will have a claim against the seller, but such prior knowledge can be difficult to prove.”
Such situations also become problematic for estate agents.
“It becomes tricky because under the Consumer Protection Act, the agent is facilitating the sale in the course of his day-to-day business and could be held accountable for not carrying out typical issues expected of the agent. This would include educating and informing the seller and purchaser of the potential liability of not ensuring municipal building compliance.”
Exceptions to the clause
According to law firm Michalsons, common law exceptions to the voetstoots clause that allow buyers to cancel the contract or sue the seller for a reduction in the selling price include:
- That the article had a defect at the time of the sale.
- That the seller knew of the defect.
- That the seller did not disclose the defect.
- That the seller deliberately concealed the defect as knowing that if it was not concealed and the purchaser saw it, he (the purchaser) would either not have continued the purchase or he would have negotiated a more favourable purchase price.
- The seller knew of the defects and did not tell the purchaser about them. l If the seller made fraudulent or innocent material misrepresentation (but only if the latent defect is so serious that if the purchaser had known of it, he/she would not have bought the goods)