If you already own a home, or are seeking to take your first step onto the property ladder, you will understand the importance of this investment. On a financial and personal level, it is one of the most important decisions you’ll make, so you’ll want to ensure that you have all the information you need to make an informed decision. As such, one of the things you really need to take into account is the voetstoots clause.
What is the voetstoots clause?
The English equivalent is buying something “as is”, i.e. in the condition you find it. It’s up to you to test and make sure the thing is fit for the purpose you need it. Originating in Roman-Dutch law, voetstoots is a Dutch phrase that translates as “testing something by shoving it with one’s foot”, and implies that when you buy something, what you see is what you get and it’s your responsibility to give it a kick with your foot, if that’s what you need to do to test it. Any complaints you have following transfer of property will not be entertained by the seller, as the responsibility is on you to check what you’re buying. Of course, you can only check for what you can see (and these are called patent defects – for example, a broken window). A voetsoots clause here will protect the seller, and leave the home buyer without a claim. Different is where the defect is latent, i.e. it can’t be seen or was concealed.
Voetstoots obviously has significant implications for homebuyers, who will be concerned about the prospect of ‘latent defects’. This refers to problems with the home that are not visible at first glance, such as a leaking geyser, or a broken drain pipe, or maybe a rising damp if you are buying in summer. According to the voetstoots clause, if you discover such defects after you’ve purchased the home, they’re your problem unless you can prove that the seller knew about the defect and failed to disclose it or worse concealed it.
The home buyer does have some protection, in that they can hold the seller liable if the seller knew about the defect, but failed to warn the buyer. Unfortunately, this is a very difficult thing to prove in a court of law as you have to prove what the seller knew. The seller may say that he or she didn’t know that the geyser was leaking. Of course, if the seller concealed the defect, for example, by painting over damp, that might be easier to prove in Court. Legal battles are expensive and risky, and proving what the seller knew can be tough. That can mean that paying for a house inspection by an expert is a worthwhile cost for you when making your big investment of buying a home. You can make your offer subject to a successful house inspection.
What about the Consumer Protection Act?
Having come into effect on 1 April 2011, the Consumer Protection Act has altered the playing field somewhat. The seller can no longer feel completely secure under the protection of the voetstoots clause, as the CPA grants the buyer the right to receive goods that are of good quality, and suitable for the purpose for which they are generally intended.
However, the complication for home buyers is that the CPA only applies to sales made “in the ordinary course of business”. A home being sold by an owner is considered to be a private sale and isn’t part of a business. This means no CPA protection for most home buyers. The position is different where you buy from a developer, builder or investor seller who makes property sales as a business. Those sellers are bound by the CPA. The CPA will not likely apply to private home sellers. The Court’s decision will likely depend on the context of the situation and you should get legal advice if you find yourself in this situation.
So what does it all mean for homebuyers?
It means you have options available to you if you discover latent defects after purchasing a home, but that you’re still better off trying to prevent such a situation from arising in the first place, by conducting a thorough home inspection before signing the offer to purchase or making a successful home inspection a condition precedent (“subject to” clause in your deed of sale).
If you can prove the seller knowingly sold you a home with defects, you can attempt to claim compensation within three years of the defect being discovered; but you may be in for a protracted legal battle that could potentially cost you more than if you had simply paid for the repairs yourself. You also have the risk of having to prove that the seller knew of the latent defect, and the seller may deny this.
So, do your due diligence beforehand; arrange for a professional to perform a home inspection. This can generally form part of the purchase agreement. The seller should also receive a copy of the report, and you can make the agreement contingent on them performing the required repairs or by adjusting the purchase price and doing the repairs with your own contractors. If the seller does the repairs, you can ask that the warranties are ceded to you so you can claim against the contractor if the repairs aren’t done correctly.
These are all important steps in the home buying process, and will be worth the effort in the end. If there’s a particular property that you have your eye on, ooba Home Loans, South Africa’s largest home loan comparison service, offers a range of tools that can make the process a lot easier. Start with their home loan calculators, then use the ooba Bond Indicator, a free, online prequalification tool, to determine what you can afford. Finally, when you’re ready, you can get one of our experts to do a free qualification or to apply for a home loan for you to all the major banks. Our services are without obligation and are at no cost to you. ooba can get you home loan quotes to compare, including from your own bank.