Prior to the Consumer Protection Act (CPA) of 2008, 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 appeared that there was indeed a latent defect evident.

Example: A seller sells his car to Piet and shortly thereafter the engine seizes. The seller would then 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 an obvious defect that can be seen, or can be noticed when exercising reasonable care.

Example: A crack in a wall, or a crack in a wall behind a portrait.

VOETSTOOTS

In similar examples as to the one above, where Piet bought the car, it became common practice to include a voetstoots clause in the sale of second-hand goods, including older houses.  It made sense because the car is old with many existing imperfections, and as the defect in the engine could not be seen, the seller is therefore not aware of the defect.  Voetstoots means "as is" and if sold with a voetstoots clause, the seller is no longer liable for the latent defects in the goods.  Piet would therefore own the car with the seized engine, and would have no recourse against the seller, unless he can prove that the seller knew of the defect and fraudulently hid it from Piet.

THE CONSUMER PROTECTION ACT (CPA)

In terms of the 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 in the business of selling houses. For this reason, the average property transaction does not fall under CPA and may contain a voetstoots clause. In our example above, if the pipe in the wall bursts after registration of the transfer, the seller cannot be held liable if the contract contained a voetstoots clause.

In contrast, developers and people who speculate with properties are selling properties in the ordinary course of their business and therefore are suppliers and have to comply with the CPA. This means the general voetstoots clause does not apply.

CAVEAT EMPTOR

In the case of patently obvious defects, there is a duty on the purchaser of a property to inspect that what he is buying and exercise the inspection with reasonable care. (Caveat Emptor – be careful purchaser)

Often, defects that the purchaser picks up once he occupies the property are patent defects, which the purchaser could have noticed if he exercised reasonable care when he inspected the property that he is buying.  He could have seen the crack behind the portrait if he had looked behind the portrait.  So in conclusion, when you buy a house you should look carefully for such hidden defects that could otherwise be missed because you did not do a thorough inspection prior to your purchase.