Advice and Opinion

The 'Voetstoots' Clause – What & If?

The Consumer Protection Act (CPA) does not negate or override the “voetstoots” clause that still appears in most property sale agreements.

That’s the word from Bill Rawson, Chairman of the Rawson Property Group, who says that this issue has been extensively discussed by real estate and legal experts as many consumers are still under the impression that the “voetstoots” clause is no longer applicable to home sales and may not be included in sale agreements.

“They seem to think,” he says, “that if they find any latent defects in a property after they have purchased it, the CPA will entitle them to cancel the deal and get their money back, or claim damages either from the seller or from the agent who facilitated the deal”.

“However, this is simply not true. It has become clear that the CPA may apply in some cases where the seller is a property developer or a speculator whose ‘usual business’ is to build homes and sell them, but does not apply when an individual homeowner is selling his home to another individual – because it is not the ‘usual business’ of that homeowner to sell real estate”.

“In addition, since an agreement of sale is a contract between the seller and the buyer, and the estate agent is generally only the facilitator of that agreement, the buyer cannot look to that agent for damages if he later decides he is not satisfied with his purchase.”

This means, Rawson says, that the seller or his agent is still allowed to include a “voetstoots” clause, which basically states that the buyer is agreeing to purchase the property “as is” or “as it stands” on the date the sale agreement, including all visible and invisible defects and any conditions or servitudes contained in the title deeds. “The buyer is of course quite entitled to refuse to accept this clause, but if he does accept it, he will not be able to cancel the sale agreement if defects are later found in the property, unless he can definitively prove that these are latent defects and that they were deliberately concealed with the intention to defraud him.”

This was once again confirmed, he notes, in a recent Pietermaritzburg High Court case (Haviside v Heydricks and Another) in which the court found in favour of the seller despite the fact that the buyer only discovered certain defects after the transfer of the property. “The judgment was that the “voetstoots” clause in the sale agreement meant that the buyer had agreed to buy the property as it stood and that the seller could not be held liable for latent or patent defects. If the buyer had wanted to escape the provisions of the “voetstoots” clause, he would have had to prove that that seller intentionally withheld the information from them, but had not done so.”

In other words, Rawson says, the situation with regard to ordinary home sales is actually much as it was before the introduction of the CPA – and buyers should still inspect any home they are thinking of buying with great care, and get a professional home inspector to help them if necessary.

“At the same time, we really believe home sellers should be as open and honest as possible about any defects that are known to them and ‘go the extra mile’ to show that they are not deliberately concealing any faults and are ready to negotiate transparently and in good faith”.

“And the best way to do this is to work with a professional agent who really understands that his or her job is not just about marketing your home and finding prospective buyers, but also about seeing the transaction through to the end, when the property is successfully transferred to a new owner.”
Such an agent, he says, will diligently to go through your home in detail and properly assess how it compares to others currently on the market or recently sold in your area, and then assist you to set an asking price that is fair for the property in its current condition. He or she should also be able to tell you what repairs or improvements would be essential and/or most cost effective if you want to attract more prospective buyers and better this price.

“On top of that, most reputable agents these days will ask you to sign a detailed disclosure reports to be incorporated in the sale agreements and also signed by the buyer, so there can be no dispute later about what was and was not disclosed.”