The Voestoots Clause and Property Sale Agreements

THE VOESTOOTS CLAUSE AND PROPERTY SALE AGREEMENTS

During the initial waves of the Covid-19 pandemic in 2020 and 2021, there was an unexpected strength in the South African housing market which resulted from first-time purchasers responding to the decrease in interest rates. Purchasing a home is an exciting prospect for most people. However, some purchasers have found that buying a home can be as stressful as it is exciting.

When a seller (or a seller’s estate agent) puts a house on show, they will typically focus on all of the positive aspects of the property, and will not draw the prospective purchaser’s attention to any of the negative aspects of the property. An unwitting purchaser may not realize that there are serious defects in the property, and only discover them when they have already purchased the property. How does the law protect the purchaser in such a scenario?

Defects typically fall into two categories, namely patent and latent defects. Patent defects are those that are apparent to the eye, should a reasonably thorough inspection be done. Latent defects on the other hand are material defects that are not visible to the eye upon a reasonable inspection.

In Holmdene Brickworks (Pty) Ltd v Roberts Construction Co Ltd 1977 (3) SA 670 (AD), a latent defect was defined as “an abnormal quality or attribute which destroys or substantially impairs the utility or effectiveness of a res vendita (ie, the property / thing sold), for the purposes for which it has been sold or for which it is commonly used.”

In the case of Odendaal v Ferraris [2008] 4 All SA 529 (SCA), when conceptualizing what constitutes a latent defect, the Court described it as, “any material imperfection which hindered or prevented the ordinary common use of the thing sold.”

Many sellers include a “voetstoots” clause in the sale agreement, meaning that the property is sold “as is”, inclusive of any defects it may have. If a voetstoots clause is included in the sale agreement, the seller cannot be held liable for latent defects later found on the property unless the purchaser can prove that at the time of the transaction the seller:

1. was well aware of the latent defects;
2. deliberately did not disclose to and/or concealed the defects from the purchaser;
3. had the aim of misrepresenting to and defrauding the purchaser.

A seller who acts with the intention to conceal defects from a purchaser could be held liable to the purchaser to remedy the defect/s. In cases where the concealment of the defect/s amounts to a material misrepresentation, the purchaser may elect to have the sale agreement rescinded.

At Pagdens Attorneys we assist with all property related matters, including the transfer of property, bond cancelations, as well as with property related litigation. If you require assistance, please do not hesitate to contact us at info@pagdens.co.za or 041 502 7200

This article is for general information should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact an attorney for specific and detailed advice. Errors and omissions excepted (E&OE)