These days, the seller and his agent are required to let the buyer know of all defects or potential defects regarding the property for sale even if it is being sold voetstoots. If the seller does not disclose the defects he could be held liable for damages. In fact, the law makes it mandatory for sellers to attach a disclosure form to the agreement of sale. So the buyer must insist on a copy of this document before signing an Offer To Purchase.

That being said, it’s important for the buyer to look for potential pitfalls when he is potentially interested in purchasing a property and the best way to do this is to pay the cost of bringing in a house inspector. It’s well worth it and could potentially save the buyer tens or even hundreds of thousands of rands in the long run.

Here are 3 major defects a home inspector would look for:

  1. Poor drainage – does stormwater flow away from the house properly, does the roof need new gutters and downpipes, is there a danger of water ponding seeping under the foundations.
  2. Faulty electrical, plumbing and gas installations. Wiring, DB boards, hot water geysers, plumbing pipes, gas lines and sanitary ware must be checked.
  3. Hazardous materials such as lead-based paint, asbestos materials and unhealthy levels of potentially toxic moulds.

There are quite a number of other defects which we will cover in future articles but if you are curious to know about them now please contact one of our legal experts who will further answer your questions.

The voetstoots clause is included in the sale agreement when the purchaser agrees to buy the property as it stands with a full understanding of its defects. In this case, the seller has a duty to disclose all hidden (latent) defects to the buyer. At the same time, it’s the purchaser’s responsibility to carefully inspect the property before deciding to buy it. He must be satisfied that there are no visible or obvious (patent) defects. In essence, this means the “voetstoots” seller is not responsible for patent or latent defects that have been disclosed.

But what happens if certain defects go undisclosed? If these are discovered by the purchaser after he has bought the house, he can still claim for compensation from the seller. He must, however, be able to prove that the seller knew about the defects and failed to disclose them. This can prove to be quite a challenge.

Attorneys are therefore often reluctant to sue the seller under common law. Instead, they turn to the CPA. This means it could be the estate agent and not the seller who faces legal action!

Under the Consumer Protection Act (CPA) 68 of 2008, consumers have the right to fair value, good quality and safety. So how does this apply to property transactions? In simple terms, the CPA doesn’t have a strong role to play when it comes to the sale and purchase of immovable property, especially residential property. This is because of the limitations imposed by the CPA itself. For example, the Act applies only to transactions where the seller sells property in the course and scope of his ordinary business. In other words, it mostly doesn’t apply to a sale where the seller is an individual owner of the property but does not actually sell houses for a living.

The CPA only applies to the sale of immovable property where the seller is a property developer or investor who buys, renovates and sells houses as a business.

So what happens if there are defects to the property? Common law is applied and it takes two positions regarding the liability of the seller, namely, the inclusion and exclusion of the “voetstoots” clause. Read how “voetstoots” works in the answer to the next question.

Our common law states that the seller gets to choose who the transferring attorney/conveyancer will be. However, the buyer must pay the transfer and attorney costs. This may seem unfair but if you think about it, the seller is more at risk if the deal doesn’t go smoothly because he is the party receiving the money. The seller is therefore entitled to choose an attorney who he feels safe with and can trust to manage the sale/transfer of the property. Ultimately to ensure a smooth and speedy transaction and receipt of money from the buyer.

This doesn’t mean the purchaser cannot suggest a transferring attorney but the seller would have to agree on this, which doesn’t happen very often.

In a nutshell, by law, the seller, as the owner of the property, gets to decide on the conveyancer because he stands to lose much more if things don’t go according to plan.

This all depends on the marital contract you both signed when you got married. Let’s take a look at the various marriage contracts and how it affects the sale of the property.

In Community of Property means that no matter whether the house was bought before marriage or whose name it’s in it, once the house is sold the profits get split down the middle. Something to take note of if you are in a traditional marriage: According to the Recognition of Customary Marriages Act, these couples are automatically regarded as being married in community of property.

Out of Community of Property With Accrual means if the home was bought during the marriage, it may be sold, with the net proceeds split between the couple, or either party can buy the other out. If the couple chooses the latter option, the transfer of the half-share of the property will be exempt from transfer duty. If the property was bought before the marriage by one of the individuals and was not excluded in the antenuptial contract, it will go to the spouse in whose name it is registered.

Out of Community of Property Without Accrual means the spouses’ estates remain entirely separate. In other words, both partners retain the assets they had before the marriage, as well as any assets accrued during the marriage. In this case, if one spouse owns the property, the net proceeds go to this person. If both own the property, the net proceeds are split equally.

A divorce agreement can override the terms of a couple’s marital contract so both spouses can agree on how they want to divide the net proceeds from their property no matter how they married. However, if they cannot reach an amicable agreement, the property will be divided according to the marriage contract.

The court can get involved and use its own discretion on how the property is divided if misconduct can be proved against a spouse. For example, if there has been abuse in one way or another in the marriage.

Both the seller and the buyer have certain responsibilities and obligations that they need to address during a property transaction before the property can change ownership. And both parties should prepare financially before they either selling or buying a property because there are extra costs, legally and otherwise, on both sides.

The buyer is responsible for the transfer fees and the bond costs if registering a bond with a finance provider. Also, when a property is bought and transferred into the buyer’s name, the government levies a tax on the property transaction based on the value of the property. However, properties valued below R750 000 are exempt from paying transfer duty, and properties bought for more than R750 000 are charged on a sliding scale percentage relative to the property’s value. Transfer duty is paid to the conveyancing attorneys about one month before the transfer of the property into the buyer’s name. This is why you should have money saved up before you even begin to look for your new home.

The seller is responsible for paying the agent’s commission, which is usually deducted from the money received from the sale of the property. The seller also pays for all clearance certificates for the property such as an Electrical Certificate of Compliance (ECOC), which must not be older than two years and must cover all electrical installations during this time. Sellers should note that electric fences are covered under a separate certificate. Other clearance certificates will include a water and plumbing certificate, plus a gas certificate and beetle certificate (to check for insects such as wood borers that can cause damage to a property), if applicable. If no repairs are required in order to obtain the certificates then the seller must be prepared to pay for this, too.

By law, the seller must provide the buyer with an electrical compliance certificate that covers the permanent electrical installation – this means everything from where the Eskom cables join the property up to the point where the cables end at the appliances (plug point, light fitting and the permanent connection at a stove, pool pump, air con unit or geyser). In other words, the actual appliances that run from these points do NOT form part of the compliance certificate, no matter whether they are temporary or fixed appliances.

Fixed appliances are those that run from the permanent connection point and will include the stove. This essentially means that you cannot expect a compliance certificate from the seller. However, since the stove is a fixed asset (it gets sold with the house) if you are concerned about its working condition, you are entitled to negotiate with the seller that they repair it before you sign the sale agreement. The seller should by law disclose any issues with fixed appliances to the interested buyers.

Do not sign the sale agreement until you have had a home inspector take a look at the problem as well as inspect the rest of the property. You will be required to pay the inspector but it is a worthwhile cost as it may save you hundreds of thousands of Rands later on. If the inspector confirms there is an issue with the roof or any other part of the structure, book a FREE telephonic consultation with Bert Smith Property Attorneys & General Conveyancers.

As property attorneys and conveyancers, it’s our job to make sure you are not signing something that could come back to bite you later. For example, signing a disclosure document that states the house you are agreeing to buy is in good condition can land you in a lot of expensive trouble if the roof needs to be replaced or there is something else wrong with the house that will be expensive to repair. We can help you negotiate a sale agreement where the amount it costs to repair the roof is deducted from the purchase price.

2016 Bert Smith Incorporated

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