No longer ‘as is’ for ‘voetstoots’ law
Jul 18 2010 09:28
Elma Kloppers
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Johannesburg - The interpretation of the voetstoots (“as is”) clause in property sales agreements is to be amended by the new Consumer Protection Act.
At this stage, there is intense debate between lawyers and property experts regarding the extent to which the clause is likely to be altered.
They agree, however, that the act, which comes into force on October 24, will offer property buyers greater protection than before.
Schalk van der Merwe, a property attorney at VFV Mseleku, says the common-law position of the voetstoots clause in property transactions is not being amended for one-off deals where individuals sell their houses, but only in cases where the sellers are developers, speculative builders, or those whose primary objective is dealing in property.
Voetstoots has always meant that a property is sold “as is” – no matter its condition and without any guarantees.
The buyer is protected only in a case where there is an assumption that he has been cheated by the seller in that the seller knew about defects and deceptively kept quiet about them.
Van der Merwe says Section 55 of the act stipulates that every consumer has the right to receive goods that are appropriate to the purpose for which they are bought and that they should be of good quality, in working order and without defect.
This clearly changes the voetstoots principle, because the requirement of fraud now falls away and the supplier must make sure of the product’s quality – in this case that of the property, he says. What this amounts to is that the supplier has to check the property himself for both latent and obvious faults.
The seller can no longer hide behind being unaware of the defects.
But Van der Merwe says Section 55(6) of the new act does afford one the opportunity to sell a second-hand house, for instance, as is. This section determines that if the buyer is expressly informed that the property is being provided in a certain condition and he accepts that proviso, he is obliged to accept what he gets.
Grey areas
Another example is where a property developer has an independent building contractor building for him, and the developer does not have personal knowledge of any defects. The question is then whether the developer would be entitled to indemnify himself in this way.
This is ultimately precisely the nature of a voetstoots clause, and Van der Merwe says the question is how narrowly or broadly the courts would interpret the section.
Some lawyers refer to Section 48(1)(c) of the act, which in turn says that a supplier cannot expect a consumer to relinquish any rights.
Van der Merwe says the issue that arises is whether a stipulation in which the speculative builder warns the buyer that he offers no guarantee, and that the buyer should check the goods himself, now falls under Section 55(6), or Section 48(1)(c).
He says that the new act gives rise to several grey areas, as with all new legislation, and it will take a few years and decisions by the courts to provide legal certainty.
Jan Davel, chief operating officer of the RealNet property group, says that what confuses the issue even further is that it's not at all clear whether estate agents, whose normal business involves property transactions, will have the same accountability as primary suppliers and whether they will be considered third parties in one-off transactions where the voetstoots clause may still apply.
One can be sure, however, that the man-in-the-street will enjoy better protection than before, and that providers of new property will have to re-examine their standard contracts to bring them into line with the provisions of the act, says Van der Merwe.
Davel notes that a simple way to circumvent the current debate over the voetstoots clause in sales agreements lies in having an independent inspection of the home.
In the United States and in Britain properties being sold need to pass inspection by an independent, accredited expert before the prospective buyer can obtain a home loan.
Davel says although the system was initially introduced to give financial institutions peace of mind, a successful inspection holds big benefits for both buyer and seller.
- Sake24
