The voetstoots clause and defects in property.

The purchasers and sellers entered into an agreement of sale of a house. The purchasers take occupation of the property and excitedly move into their new home before registration. Their excitement is however short lived as if becomes clear after the first major rainfall that the roof is leaking. The purchasers demand that the sellers pay for the roofing repairs. The sellers refuse claiming that the property was sold voetstoots and that they are therefore not liable for the repairs. This is a scenario that too often plays out during the transfer process. Understanding the voetstoots clause as well as the sellers’, and purchasers’, responsibilities may prevent unnecessary disappointment and costly legal action after entering into an agreement of sale.

What does the voetstoots clause mean?

The term originates from Dutch and translate directly to “with the shove of a foot”. The term in effect means that the property is sold “as is” or “as it stands” at the time of the sale.

In terms of the common law a seller of property warrants that the property is sold free of any latent (“hidden”) defects. All sale contracts are deemed to have this implied warranty. The incorporation of a voetstoots clause makes it possible for sellers to contract out of the implied warranty that the property is free of latent defects and shields sellers from incurring liability in respect of latent defects that they were unaware of at the time of the sale.

What is a patent and latent defect?

In order to understand the voetstoots clause it is important to understand the distinction between patent and latent defects.

A patent defect is a defect that is clearly visible on a reasonably and thorough inspection of the property and does not require an expert inspection. Examples are broken windows and cracks in the wall. The purchaser has a duty to inspect the property before entering into an agreement of sale and cannot hold the seller liable for patent defects unless contracted otherwise.

A latent defect is a material defect, which is not visible upon a reasonable inspection of the property. A leaking roof, faulty geyser or structural problems with the foundation are examples of latent defects.

Who does the voetstoots clause protect?

The voetstoots clause protects the seller against liability for latent defects in the property unless the seller was aware of the latent defect at the time of entering into the agreement and concealed the defect with the intention to defraud the purchaser.

Weighing up the responsibilities of the buyer and the seller.

Sellers have the duty to inform purchasers of all latent defects that they are aware of as well as any abnormal or unusual qualities of the property at the time of contracting with the purchasers. This applies to all information that does not fall within the reasonable scope of the buyer’s knowledge or where the seller has exclusive knowledge relating to the property.

Sellers will not be able to hide behind the voetstoots clause where:

a) They were aware of the latent defect at the time of entering into the agreement;

b) They concealed the existence of the latent defect with the intention to defraud the purchasers.

This was confirmed in the case of Odendaal v Ferraris (422/07) ZACA 85; [2008] 4 All SA 529 (SCA) where the court stated that if a seller conceals a latent defect in the property intentionally, the seller cannot rely on the voetstoots clause.

However, the courts have also found that purchasers are obliged to take reasonable action to protect themselves and are therefore obliged to carry out a thorough and reasonable examination of the property to identify patent defects before signing an offer to purchase. This inspection should include moving away large items to ensure that the areas obstructed by these are free of defects. If Purchasers note defects in the

property that are not acceptable to them, they may insert a clause in the offer to purchase stipulating that the seller remedy the defects. Should the seller accept the offer to purchase on these terms the seller will be contractually liable to remedy the defects.

The Impact of Recent Legislation on the Voetstoots Clause.

The Consumer Protection Act (the “CPA”)

The CPA applies to transactions that occur within the Republic of South Africa as well as to the suppliers of any goods or services in the Republic. In instances where the CPA is applicable it requires that the purchasing of goods or property comes with an implied warranty that the thing being purchased is sold free from defects and of good quality. In instances where the CPA applies the voetstoots clause cannot form part of the agreement. The CPA has application to agreements concluded by sellers, who supply goods (property) in the ordinary course of business.

A private sale of immovable property does not fall within the ambit of the CPA, as it would not be deemed to be in the ordinary course of business of the seller and a voetstoots clause may therefore form part of the sale agreement.

The CPA also does not apply to a transaction if the purchaser is a juristic person with an asset value or annual turnover exceeding two million Rand. A voetstoots clause can therefore be included in the agreement.

Property Practitioners Act (the “PPA”)

The PPA came into effect on the 1 st of February 2022 and is designed to protect consumers in the immovable property industry. The PPA obliges property practitioners, (previously known as “estate agents”) to obtain a “disclosure form” from a seller before concluding a mandate, and to provide it to a purchaser before making an offer to purchase. The disclosure form must be signed by all parties and attached to the sale agreement.

If no disclosure form is signed and attached, the PPA provides that the sale agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser. In term of the Act the property practitioner (estate agent) could be held liable in the instance where the disclosure form was not provided and damages were suffered as a result thereof.

Besides the aforesaid requirements, the PPA does not impact the validity of a voetstoots clause in a sale of property agreement.

It is important for the parties to a property transaction to familiarise themselves with the voetstoots clause and to carefully read the sale agreement to avoid costly and unnecessary legal battles. Contact us for more

information and assistance.