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Voetstoots & CPA
01 March 2016
 
Before the Consumer Protection Act (CPA) the common law provided that a person who sold his goods (including a property), were selling it with an implied warranty that there are no latent defects in the goods. A person who sold his goods would therefore be liable if it appears that there was a latent defect in a property.

Example: I sell my car to Piet and shortly after the sale the engine seizes. I would be liable in terms of the common law to repair the damage.

PATENT AND LATENT DEFECTS
A latent defect is a defect that cannot be seen.

Example: A crack in a pipe that is inside a wall. 

A patent defect is defect that can be seen or can be seen be exercising reasonable care.
Example: A crack in a wall or a crack in a wall behind a portrait.

VOETSTOOTS
Due to the fact that the latent defect cannot be seen and often a Seller is also not aware of the latent defect, as in our example in 1 above it became common practice to sell goods that are not new, voetstoots. Voetstoots means "as is" and in the event of a voetstoots clause in a contract the Seller is no longer liable for the latent defects in a property.

If a contract contained a voetstoots clause the Seller could only be liable if he knew of the defect and fraudulently hid it.

An agent must take instructions carefully from a seller before marketing a seller's property and also do his own inspection carefully. It often happens that a seller alleges that he did tell the agent of a defect. If the agent's paperwork is in order, this should solve the problem.

THE CONSUMER PROTECTION ACT (CPA)
In terms of CPA the Seller of goods gives an implied warranty in respect of the quality of the goods in that:
the goods are reasonably suitable for which they are generally intended;
are of good quality, in good working order and free of any defects (latent or patent);
will be useable and durable for a reasonable period of time

The effect of the above implied warranty is that a Supplier can no longer sell his goods Voetstoots.

DOES CPA APPLY TO PROPERTY TRANSACTIONS?
CPA would only apply if the Seller is a Supplier in terms of the Act and he would only be a Supplier if he is selling the property in the ordinary course of his business. The average home owner is not a Supplier and therefore the average property transaction does not fall under CPA. 

It is therefore totally legal to include a voetstoots clause in those transactions that does not fall under CPA.

The most obvious exceptions are developers and people who speculate with properties, who are selling property in the ordinary course of their business, who are therefore Suppliers and have to comply with CPA and cannot include a Voetstoots clause in their contract.

CAVEAT EMPTOR
There is a duty on a purchaser of a property to inspect what he is buying and exercise the inspection with reasonable care. (Caveat Emptor – be careful purchaser)

Often defects that appear after the signature of a deed of sale are patent defects, which the purchaser could have seen if he exercised reasonable care when he inspected the property that he is buying, like looking behind the portraits to see if there are any cracks and opening and closing doors to make sure that they close properly.

There is no duty on the seller or his agent to indicate to a purchaser such patent defects, but it is always better to be transparent as it will prevent unnecessary disputes.
 
 
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Tags: Property