About Charlene…

Charlene (Goliath) Foster, the founder of Goliath Attorneys, completed her BA degree in Education and was a teacher for 15 years. As she holds social and community upliftment as core values, she identified a gap in access to legal services among the broader community and set out to fill this gap.

She completed her BA Law degree through Unisa, as well as her Conveyancing and Notarial Practice qualification. Charlene then served as director at a Johannesburg law firm for several years. She continued striving towards attaining her goal of public service on a more personal and accessible level by starting her own law firm in 2015, specializing in property and administration of deceased estates.

After reading this Q&A, you will know:

1. What the “voetstoots” clause is in a sales agreement and how it protects both buyer and seller.
2. What latent and patent defects in a property are.
3. The law around these defects and where the responsibility rests regarding these defects.
4. Examples of both types of defects.
5. How both buyer and seller can assure that they are legally protected when it comes to the “voetstoots” clause, as well as latent and patent defects to the property in question.
6. How to prevent a legal dispute between buyer and seller when it comes to latent or patent defects to a property.
   
   

Conflict between a buyer and seller often arise because of defects to a property not having been properly disclosed. But legally, there are certain defects to a property that the seller doesn’t have to disclose. In other words, the onus is on the buyer to inspect the property thoroughly. There are other instances where the seller must legally disclose a defect but intentionally withholds the information because they might lose the potential sale. Whether a defect is disclosed or not, and no matter which party’s responsibility it is to either disclose or thoroughly inspect the property, the nature of the defect will always be revealed in time. Unfortunately, this only happens after registration of the property, when there’s legally not much that can still be done.  

In order to have clarity on the defects to a property and who’s responsible, it’s important to first understand the “voetstoots” clause in a sales agreement. What does the “voetstoots” clause mean, and who does it protect? Unless otherwise stipulated, this is how most properties in South Africa are sold.

It’s a tricky subject, and only one for a legal expert to unpack, so I’ve called in the help of well-respected conveyancing attorney Charlene Goliath. Here’s what Charlene had to say about this matter.  

The Property Dude:

Charlene, we’ve been in conversation about the legal aspects of real estate on other platforms, and I’m honoured to be able to share this platform with you. I don’t know if it is because you were a teacher many moons ago, but you do have the ability to break down complicated legal matters into bite-sized, palatable chunks.

Before we get into defects and the different types of defects, let’s first look at the “voetstoots” clause. This is a clause that appears in almost all sales agreements in South Africa. What exactly does this clause mean?

Charlene:

What the term in effect means is that the product – in this case, the immovable property – is sold “as is” or “as it stands”.

This simply means that what you see is what you get and that no warranties exist. In other words, the purchaser agrees to buy the property as it appears at the time of the sale and that there will be no claims against the seller for any defects which are discovered later. This clause indemnifies (protects) the seller against claims for damages in respect of any defects on the property, whether patent or latent.

The Property Dude:

This is where things become complicated and often leads to conflict between buyer and seller. Please shed a bit more light on the matter? When does the “voetstoots” clause protect the seller?

Charlene:

The seller is protected by this clause for damages which he was unaware of at the time of concluding the sale. A seller cannot rely on the “voetstoots” clause if the seller was aware of a latent defect and deliberately concealed or failed to disclose it with the intention to defraud the buyer.

The Property Dude:

We’ll get to the defects and how the law interprets the roles and responsibilities around the defects, but first, there seems to be a lot of controversy around the “voetstoots” clause. Are there instances where the “voetstoots” clause does not apply during the sale of a property?

Charlene:

In terms of the Consumer Protection Act, the “voetstoots” clause will not be applicable to a property transaction where the seller is selling the property in the ordinary course of business. This will typically be applicable to developers, builders and (property) investors.

If there is no “voetstoots” clause in the deed of sale, the seller is legally obligated to correct latent defects arising on that property for a period of three years after the sale of the property.

The Property Dude:

Great. So now we know that if you buy a property directly from a developer, that developer isn’t protected by the “voetstoots” clause. This is very important for home buyers to understand that when they buy a property directly from a developer, they are protected by the Consumer Protection Act.

Let’s get back to the normal sale between a homeowner (seller) and a buyer, and let’s unpack the defects that we’ve touched on earlier. The law is very clear about latent and patent defects. Please explain what the difference is between the two types of defects?

Charlene:

Patent defects are those defects that are visible, whereas latent defects are hidden and not discoverable through reasonable inspection.

The Property Dude:

Please give examples of each of these defects.

Charlene:

A patent defect is clearly visible upon reasonable inspection, such as a crack in a wall or window. Flushing mechanisms of toilets, loose skirting, cracked floor tiles and such also qualify as patent defects.

The Property Dude:

So latent defects are defects that cannot be seen with the naked eye, such as leaks in the roof, faulty geysers, and faulty pool pumps. It now makes complete sense why there can be conflict when the seller doesn’t disclose these defects.

But let’s just stay on patent defects for a minute. Since the patent defect is “visible” (or obvious), is it still the seller’s duty to point it out to the purchaser? Or is it assumed that the buyer would see it? And does this make the seller not accountable?

Charlene:

Since the sale is “voetstoots” – in other words, sold as is – it’s up to the buyer to look for patent defects and stipulate in the special conditions clause that these obvious defects be corrected, and/or state who’ll be responsible for fixing or replacing the defect.

The Property Dude:

So, to clarify, the buyer is responsible for pointing out the patent defects and can’t hold the seller accountable afterwards if the buyer didn’t do a proper inspection when viewing the property.

Now, let’s say there was a leak in the roof (which we’ve said is a latent defect, because it isn’t immediately obvious), and the seller fixed the leak before he puts the property on the market, should the latent defect still be disclosed?

Charlene:

If this leak has been repaired and the seller has a bona fide (genuine) belief that this was correctly done, there technically is no longer a defect. He is under no obligation to disclose this fact.

The Property Dude:

In other words, if the seller genuinely believes that the leak in the roof was fixed, he has no obligation to disclose the defect.

Let’s move on. So, we now know that the seller has a legal obligation to disclose latent defects to the buyer. What if he fails to do so, and the buyer only discovers a defect after registration?

Charlene:

A defect, legally speaking, is a flaw that creates an unreasonable risk of harm in its normal use. In terms of the common law, a seller is liable to a buyer for all latent defects in the property sold for a period of 3 (three) years after the discovery of the defects.

If a “voetstoots” clause is included in a sale agreement, the seller cannot be held liable if the buyer discovers latent defects on the property – unless the buyer can prove that the seller was aware of the latent defect and failed to disclose this. The onus is on the buyer to prove that the seller knew, or reasonably ought to have known, about the defect.

The Property Dude:

Since it is not always easy for the buyer to prove that the seller knew about the defect – and considering that legal action can cost much more than repairing the defect – what legal advice do you have for the buyer, who has now taken legal ownership of the property?

Charlene:

The CPA (Consumer Protection Act) gives buyers the right to goods that are free from any defects and places the purchaser in a more favourable position. However,  the CPA only applies to sales made “in the ordinary course of business”.

A home being sold by an owner is considered a private sale and is not part of a business. The position is different where you buy from a developer, builder or investor seller who sells property as a business. A legal cost for a successful claim against the seller for latent defects is unavoidable.

The best advice I can give to the home buyer is “prevention is better than cure”, and to do a thorough property inspection before concluding the OTP (Offer to Purchase).

The Property Dude:

I could not agree more. As a buyer, make sure you know what you’re buying before you sign the OTP because after you’ve signed, you’ve entered into a binding agreement which is hard to get out of.

Now, what advice do you have for buyers when the property isn’t the seller’s primary residence (for instance an investment property), or it’s a deceased estate, which means the seller is unavailable to point out latent defects?

Charlene:

Paying for a house inspection by an expert is a worthwhile cost when buying a property. You can make your offer subject to a successful property inspection. This clause should specify the terms to which both the buyer and the seller are obligated.

The Property Dude:

I agree that R2 000 or R3 000 for a professional home inspection gives the buyer so much more peace of mind, and it really is a small price to pay. As the buyer, you don’t have to turn the property down if you discover a latent defect. You can first ask the seller to fix the defect before the sale of the property can go ahead, or you can use the report from the professional home inspector to negotiate a better price on the property.

What I also find very interesting is that once there is a professional home inspection report on latent defects to a property, the seller can no longer hide the fact that he “didn’t know” about the defect. He is now by law required to disclose the defect to any further interested buyers.

Charlene, what role can the attorney play during the negotiation process between buyer and seller, to ensure a smooth sale without conflict over latent and/or patent defects?

Charlene:

The attorney should ensure that sellers and buyers have a sound understanding of the “voetstoots” clause and the obligations and rights of the parties.

The Property Dude:

Any last piece of advice for the buyer and seller when it comes to latent and patent defects before they conclude the sales agreement?

Charlene:

You should inspect the property you intend to buy or sell thoroughly. In addition, buyers must ensure that the local authority (municipality) has approved any outbuildings, additions and alterations to the property. In terms of the law, the absence of approved building or alteration plans may well be considered “defects”.

The Property Dude:

Charlene, thank you for these great insights. I think we all have a bit more clarity on the matter of latent and patent defects, and who’s responsible for what.

Anyone who wishes to make use of Charlene’s professional legal expertise can do so by contacting her directly at charlene@goliathattorneys.co.za.