Q: Can a ‘voetstoots’ clause still be valid under the new Consumer Protection Act?
A: YES, unless you are a developer, investor or speculator
Our common law position is that a seller is liable to a purchaser for all latent defects in the property sold for a period of three years after the discovery of the defects.
Latent defects refer to defects which exist in hidden or dormant form but are usually capable of being brought to light. Patent defects refer to defects which are readily seen, discovered, or understood to be defects.
As a consequence of the harshness of this provision, the ‘voetstoots’ clause has been included in all agreements of the sale of immovable property and offers the sellers protection from the discovery of latent defects by the purchaser after the sale. This applies across the board, except where the sellers acted fraudulently by either; being aware of the defect and not disclosing it or concealing the defect from the purchaser or agent.
In terms of this, the balance has shifted with transactions that are covered by the CPA. The operation of the ‘voetstoots’ clause is excluded from transactions that are concluded in the ordinary course of the supplier’s business by operation of the following section of the CPA;
Section 55 – Consumer’s Right to Safe, Good Quality Goods (except goods bought on auction) This entitles the purchaser to receive the property or goods, reasonably suitable for the purpose which they are generally intended and are of good quality, in good working order and free of any defects.
However even more importantly and to resolve the recurring confusion amongst South African’s, is knowing when the consumers rights, provided by Section 55, DO NOT apply to the transaction.
If the purchaser has been informed expressly or in writing that; that the property was offered in a specific condition, which details all defects and if the purchaser has expressly agreed to accept the property in that condition or acted in a way the was consistent with accepting the property in that condition it becomes irrelevant whether the failure or defect was latent or patent.
This means in fact, that the ‘voetstoots’ clause can still be included in a contract on condition that the seller has clearly disclosed all defects to the purchaser and the purchaser has accepted this. The defects could be included in the contract by the means of an annexure to the contract or if the contract drafted by the agent allows for the addition of special information.
Where this is true of one-off sales the situation is different where the seller is a developer, investor or speculator. Such indivuals or companies cannot exclude liability for defects by way of a ‘voetstoots’ clause. In these cases, if latent defects are not disclosed or if the property bought by the purchaser, differs materially from the specifications, the purchaser may have the right to refuse to take transfer.
Looking at the situation as a whole, however, it seems highly unlikely that there will be any radical change in the way South African law, applying to the sale of property is interpreted. Buyers, therefore, must take great care to do their homework, analyse their financial position and refrain from signing an offer until they are 100% certain they want and can afford the home.