Up and until the Witwatersrand High Court Case in 2008 purchasers were believed to be limited in their ability to complain about the absence of an approved building plan for all structures on the property purchased or that such structures did not comply with the standards required by building laws. The said legal position was deemed to exist in the light of the voetstoots clause which is contained in virtually all sale agreements.
In this regard it was always the belief that such complaints related to issues which a purchaser could determine before deciding to buy the property and that the purpose of the voetstoots clause was to protect the seller from any complaints of this nature. It was believed that it was only in circumstances where the purchaser could prove “fraud” on the part of the seller that the purchaser could penetrate the voetstoots clause and legitimately complain.
The Witwatersrand High Court Judge upset the traditional understanding of law as set out above and rather surprisingly decided that all sellers [unless they expressly said otherwise in the agreement] are deemed in law to have warranted to the purchaser that all structures on the property are lawful constructions. He found that sellers could not shelter behind the voetstoots clause as previously believed possible. He reasoned that the voetstoots clause deals only with defects and that lack of approved plans or national building standards compliance was not a “defect”.
The Supreme Court of Appeal however in the case of Odendaal v Ferraris has now reconsidered the law in this field and has found that the Witwatersrand decision was wrong. The Supreme Court of Appeal effectively confirmed the traditional understanding of the law as set out above and which applied before the Witwatersrand case was correct.
The bottom line is that, if an agreement of sale falls outside the ambit of the National Credit Act (CPA), and such an agreement of sale contains a voetstoots clause, a purchaser cannot complain to a seller about unlawful constructions (i.e. no approved building plans at all or alternatively constructions not built in accordance with national building standards) unless the purchaser can prove that the seller perpetrated a fraud on the purchaser. If purchasers are concerned about unlawful constructions then suitable enquiries should be made before the sale agreement is finalized or alternatively the purchaser should try and invite the seller to provide the appropriate warrantee in the sale agreement.
To this end an estate agent should always bear in mind that they are deemed to be intermediaries under the CPA and for this purpose run the risk of being held accountable by any one of the parties to the agreement of sale on grounds of misrepresentation. It is advised that the estate agent for this purpose obtain written confirmation from the seller relating to the existence of approved building plans or alternatively confirmation that the construction work is in accordance with national building standards and that such a declaration be communicated to the proposed purchaser.