The Consumer Protection Act 68 of 2008 (hereinafter referred to as the ‘CPA’ or ‘the Act’) came into effect on April 1st, 2011.  The effect of the CPA on the sale of goods has been profound, and specifically includes the right of a Purchaser (referred to under section 55 of the CPA as the Buyer) to receive goods of good quality and free of defects. If a Seller is a supplier under the CPA, this places a duty on him/her to inform the Buyer of any known defects. 

A supplier in terms of the Act is a person who sells goods in the ordinary course of business. Sellers will no longer be able to seek protection from the voetstoots clause to exclude themselves from later claims by the Buyer, unless they were not aware of the defects in the property at the time of sale.

A voetstoots clause generally means that the Seller sells the property ‘as is’ to the Buyer, with essentially no warranty or guarantee against defects. There are two types of defects, namely patent and latent defects. Patent defects are defects which can be seen on reasonable inspection and of which the Seller had knowledge of at the time of the sale. On the other hand, latent defects are defects which cannot be seen and of which the Seller did not have knowledge at the time of the sale.

A Seller who is not a supplier in terms of the CPA can be protected by the voetstoots clause if he did not know of the defect at the time of the sale. If the Buyer wants to hold the Seller liable despite the presence of a voetstoots clause in a contract, the Buyer is required to prove that the Seller knew of the defect at the time of the sale and fraudulently concealed the defect, with the intention of deceiving or defrauding the Buyer, and that the alleged latent defect rendered the property unfit for the reason it was originally acquired.

In the landmark case of Odendaal v Ferraris, the Supreme Court of Appeal held that where an illegally erected structure was such that it may require either its demolition or alteration, as a condition for municipal approval of the plans, such facts constitute defects that interfere with the ordinary use of the property, thus constituting a latent defect as understood in the context of voetstoots.

A voetstoots clause also covers the absence of statutory approvals, and the particular structure in this case was not approved. The absence of statutory permission, necessary to render the building authorized, was a latent defect to which the voetstoots clause applied. If a Buyer wanted to avoid the consequences of a voetstoots sale, the onus was on him or her to also show that the Seller knew of the latent defect and did not disclose it; and that the Seller deliberately concealed it with the intention to defraud.

In Odendaal v Ferraris, there was no evidence that the appellant was aware that the garage had contravened building regulations, and no fraudulent non-disclosure was proved. The court thus concluded that the Seller was protected by the voetstoots clause, and could not be held liable for the alleged latent defect. Similarly, in the case of Haviside v Heydricks and Another, it was found that the absence of approved building plans constituted a latent defect, and that the presence of a voetstoots clause in such a scenario could protect an innocent Seller.

A voetstoots clause included in the agreement of sale will not always necessarily preclude the Seller’s liability. The Seller has a duty to reveal any latent defects to the Buyer that he knows of. In such an instance, the Seller may be called on to refund part of the purchase price or even accept cancellation of the entire sale, depending on the nature or extent of the defect.

In addition to the abovementioned, it remains in the Buyer’s best interests to have a property thoroughly inspected prior to signing a sale agreement. An inspection of the property should include the structure, any outbuildings plans, as well as the grounds plans.