Just What Should a Seller Disclose to a Purchaser?

As estate agents we often get caught up in disputes between a buyer and a seller about issues that they claim were not disclosed.  What obligation does a seller have to the purchaser and how best can you avoid costly legal issues?

As things currently stand, a standard residential property that is sold by a seller who is not a vendor (in other words, doesn’t trade in property and is not a speculator or developer) will have a “voetstoots” clause.Realtor-showing-home

This clause effectively means that the buyer must beware and purchases the property as it stands, with the seller not being liable for any defects in the property, either latent or patent.  So the obligation is on the buyer to make a thorough investigation to ensure they are happy with the property as they purchase it as it stands, without any implied warranties from the seller.

What the “voetstoots” clause doesn’t cover a seller for is defects in the property that the seller conceals from a purchaser that a purchaser, upon normal investigation, would not be aware of – such as cracked tiles under a loose carpet, damp in a wall behind a wall unit, a leaking roof, etc.

In such a case a seller would need to disclose these defects to their estate agent who would have to share this information with any interested purchaser.  Once disclosed a seller would then be free of any obligations in that regard, unless the purchaser made it a condition of sale that specific faults are attended to at the sellers cost.

In order to cover yourself and ensure the purchaser has been informed I would recommend that a seller specifies in the Offer to Purchase that the purchaser is aware of the specific defects, and then list them.  That way there can be no claim against the seller later.  If unsure it’s best to be safe and disclose them all.  A purchaser has the right to know of any 2277994-estate-agents-plansfaults they may not easily see as it may well influence the price they pay.

As a purchaser it is good to know if the property you are purchasing has approved plans for the building as it stands.  If not, that doesn’t mean you shouldn’t purchase it, but you need to be aware that you will have to, at some point in time, arrange for plans to be drawn up and submitted for approval at your cost.  If a portion of the property does not comply with municipal regulations or encroaches on building lines there is the possibility that it would have to be demolished.  So be sure to check.

As a general rule “transparency and honesty” is the best policy.  Play open cards.  There are property inspection services available that a seller can engage.  That way a purchaser knows exactly what they are purchasing and this will become a selling advantage.  Soon this will be compulsory, so why not be proactive and use this to add value to your property now.

Steve Caradoc-Davies

Principal of Harcourts Platinum
Director of Harcourts South Africa

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