Transparency and Disclosure Reduces Disputes

By far the greatest numbers of disputes arise between with a property seller and purchaser about supposed defects with a property that may or may not have been disclosed.

Firstly let me point out that the Consumer Protection Act does not cover a normal property sale between homeowner and purchaser. This Act only covers sales where the seller is a developer or speculator, and the purchaser is a natural person.

That means the “voetstoots” clause applies. This clause basically means, “Buyer beware”. It puts the responsibility on the purchaser toImage do thorough investigation on a property before he purchases. Any obligations the purchaser wants to place on the seller to rectify any faults must be stipulated in the Deed of Sale and agreed upon.

What is the role of the Estate Agent? The agent needs to ask the seller if there are any faults on a property that need to be disclosed to a potential purchaser. These could include structural problems, roof leaks, damp issues, and the like. An agent would pay special attention to problems that could not be easily seen on inspection by a purchaser. All these potentially “hidden” defects that a seller is aware of need to be disclosed to a purchaser before an offer is concluded.

If a seller did not disclose these hidden defects and it can be proved that they were aware of them, then the seller is responsible for the cost of addressing them. We’ve recently been involved in a dispute where the seller did not disclose problems with their roof. The purchasers moved in and obtained quotations for repairs only to find that one of the contractors had recently quoted the sellers on the same repairs. The seller had to cover the repair cost as they deliberately concealed these problems from purchaser and agent.

A seller is not responsible for any defects that may later appear that they were unaware of. These again fall under the “voetstoots” clause.

It would be wise for a purchaser to ask of the listing agent if there are any potentially hidden defects that need to be disclosed. Be specific about those mentioned above and any other concerns you may have. The agent will need to confirm with the seller that there are no undisclosed defects.

It is a protection for the purchaser, the seller, and the agent if everyone is transparent. Where full disclosure is made the seller has no further obligations for any future issues that arise.

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A word of caution to sellers though: When you allow a purchaser to take occupation of your property before transfer you are at risk. We have seen purchasers holding sellers’ to ransom to rectify problems that were blatantly visible for a purchaser to see and fully disclosed. Purchasers have threatened to hold up transfer until the repairs are made – costs the seller is not liable for.

Where full disclosure is made and all parties are transparent the potential for unpleasant disputes is greatly reduced.

Steve Caradoc-Davies
Principal of Harcourts Platinum, and Director of Harcourts South Africa

Email your real estate question to steve.cd@harcourts.co.za.

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