Latent defects and the voetstoots clause explained
This article was written by Neil Mc Kinon, Attorney at Hammond Pole to explain more about latent defects and the voetstoots clause.
Buying a new property can come with its own set of headaches.
Having jumped the hurdles to negotiate the purchase price, sell an existing property and then qualify for finance, the last thing any purchaser would want to deal with next are hidden problems with the property on occupation.
Most sale agreements contain the proverbial “Voetstoots” clause. But, what does this clause actually mean and what are each parties’ rights with regards to defects in the property?
In short, the Voetstoots clause means that the property is sold and purchased “as it stands”. This usually implies that the purchaser has had an opportunity to inspect the property and accept the property as it is with all of the most visible and obvious (patent) defects. In other words, by purchasing the property, fair wear and tear has been taken into account and the purchaser has accepted the property as it is.
In essence, the seller would, by virtue of the voetstoots clause, be able to escape liability to the purchaser for defects in the property which become apparent to the purchaser only after the sale has been concluded.
However, most disputes pertaining to the sale of property usually relate to “latent” defects. These imply defects which are not immediately visible to the untrained eye or which defects might be obvious but have been deliberately concealed from the purchaser.
Although the seller of a property might be able to rely on the voetstoots clause there are exceptions where a seller can become liable in instances where the defect ought to have been disclosed or where the seller knew about a certain defect but deliberately failed to disclose it. This usually happens where a defect, had it been disclosed at the time that an offer was made, might have had an affect on the purchasers decision to purchase the property or may have had an influence on the offer made in respect of the purchase price.
In the unreported judgment of Van Rooyen v Brown and another A3104/2015; the seller sold a property which contained a number of defects.
Many of the defects were visible to the purchaser on initial inspection and the seller was able to rely on the voetstoots clause. However, one of the defects was with the electrical fence which needed attention.
Although the seller assumed that the electric fence was working, it later transpired that the gardener had suffered an electric shock which led to a security expert performing an extensive inspection on the fence. The expert found that the fence had not been earthed properly and required certain maintenance.
The seller could not rely on the voetstoots clause in this instance as the court held that the Seller ought to have known about the fence.
The court specifically held that it remains the duty of a seller to deliver the property to the buyer without defects. In repeating the entrenched legal principles of “voetstoots” the court held that a seller can only rely on the voetstoots clause if, and only, when the seller was not aware of the defects.
In the example with the electric fence, the seller was aware that there was a problem given the electric shock to the gardener. In the circumstances the fault was latent and the seller ought to have known about it.
In the circumstances, it is always advisable for sellers to take careful note of problems with the property and ensure that these issues are fully disclosed to the purchaser at the time of a sale. These issues include leaking roofs, rising damp, drainage problems, ground support, faulty pool pumps, recurring electrical issues and even instances where improvements have been made to the property which might not have been approved by the local counsel or Home Owners Association.
It has even been held that a latent defect occurs where certain improvements were made to a property but no plans existed at the time of the sale.
It is therefore, also advisable for any prospective purchaser to thoroughly inspect the property at the time of making an offer. Purchasers should speak with other residents and neighbours in the complex who might be aware of potential drainage or water issues.
To the extent that it is possible, purchasers might also benefit from arranging an inspection by an independent contractor to advise about any defects not visible to the untrained eye or which were not so obvious at the time of buying the property.
In the event that defects are identified after the sale has been concluded, the purchasers only recourse against the seller is by way of a claim for damages suffered as a result of the defect. By operation of the voetstoots clause, the onus then shifts to the purchaser to prove that at the time that the property was purchased, the seller knew or ought to have known about the defect but failed to disclose it to the purchaser.
The purchasers claim for damages may include a reduction of the purchase price or a claim for the cost of making further alterations or employing a contractor to repair electrical defects etc.
With regards to a reduction of the purchase price however, the purchaser may not withhold a portion of the purchase price by virtue of the defect, he would be obliged to pay the full purchase price and then claim the reduction by way of legal action.
Depending on the status of the transaction after the sale has been concluded, it might also be possible for the purchaser to cancel the transaction by invoking the provisions of the breach clause. This form of relief may involve a High Court Application to set aside the sale. However, this type of relief can be very costly.
In conclusion, it is advisable for all parties to take the correct advice at the commencement of the transaction and avoid issues further on in the deal that might result in delays and or claims for damages which invariably also include costs.
Any seller would be ill advised to conceal issues that he is aware of at the time of a sale which would later become a problem for the purchaser.