Latent and patent defects and the CPA

Private Property South Africa
Cathy Nolan

It isn’t always advisable to take the sellers’ word for it that all is well with a property. An independent property inspector can save you a great deal of money and heartache by ensuring that the property you buy is in tip-top shape.

Strangely, although everyone agrees that buying a property is generally the biggest buying decision a person ever makes, very few people utilise the services of a home inspector to ensure that there are no major faults in their prospective home purchase. Under SA law there are two types of faults that pertain to property, namely latent and patent defects. The difference between these is fairly obvious. A latent defect is a fault that would not readily be revealed by a reasonable inspection whereas patent defects are defects that are not hidden and should easily be discovered by a reasonable inspection.

The practice of calling an independent expert to inspect a home is far more common in the US than it is here. For some reasons SA buyers are likely to taking the sellers’ word for it and will buy a home without verifying that everything is in good order.

Although many property buyers believe that they are protected by the Consumer Protection Act (CPA), in actual fact this legislation only comes into play if sellers either regularly sell property or continually market themselves as sellers of property. While the CPA does apply to estate agents, the buyer would only have a claim against the agent under CPA if he could prove that the agent was aware of the fault and intentionally withheld the information.

So where does this leave the buyer? In most cases, at the mercy of the courts. Under the Prescription Act, a purchaser has a period of three years from the date of becoming aware of the defect to hold the seller liable. On the other hand, if the CPA applies, the purchaser is granted a minimum of six months.

The CPA grants a purchaser the right to receive goods that “are of good quality, in good working order and free of any defects” and that “will be useable and durable for a reasonable period of time, having regard to the use to which they would normally be put and to all the surrounding circumstances of their supply”.

Where the goods fail to meet these standards within six months of purchase, the CPA grants the purchaser the right to return the goods to the supplier and demand either a repair or replacement, or the return of the purchase price. While this generally appears to apply for a period of six months, it may be longer in certain circumstances. For instance, the CPA explicitly states that goods must “be useable and durable for a reasonable period of time”. Hence, it may be in certain circumstances, especially with an immovable property, that a reasonable amount of time will be substantially in excess of six months. Similarly, where the seller’s false, misleading or deceptive representations induced the purchaser to conclude the sale, the period may again be longer.

In cases where the CPA does not apply, the voetstoets (as is) clause protects the seller to a certain degree, unless the seller is aware of a defect and fails to disclose it, in which case the seller’s behaviour could constitute fraudulent misrepresentation. Although many sellers believe that this clause absolves them of all responsibility as the property is sold as is, the courts have often found otherwise.

Due to the fact that the CPA does not apply to most property sales, most sellers will receive substantial protection against claims based on defects due to the existence of a voetstoets clause. As pointed out earlier, this means that where the seller was unaware of the defect, the seller is not liable to the purchaser, which is where your home inspector comes in.

Under common law, once a buyer is aware of a problem and it is evident that the fault existed in the property at the time of purchase he may recover any damages he has suffered, including the cost of having to repair the defect himself.

Although, legally speaking, it is not necessary to record known defects in the sales agreement, it does help for the purposes of proving what defects were expressly disclosed to the purchaser. If the defects are recorded, it will create a strong evidentiary basis for the seller to argue that the purchaser was aware of the defects and is thus not entitled to damages based on concealment.

It is also wise to record any defects that the seller will have repaired before the buyer takes occupation in the agreement. Essentially, this protects the buyer from a seller who, once the sale has been concluded, tries to rely on the voetstoets clause or later denies having made the guarantee to remedy the defect.

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