Many people are under the impression that the Consumer Protection Act (CPA) has replaced the voetstoots clause when a property has been sold. This is not the case and unless (a) the supplier (seller) is providing goods in the ordinary course of his or business or (b) where the consumer is a natural person, or a juristic person with an asset value or turnover below R2-million per annum. If either of the above does not apply, the Consumer Protection Act will not apply.
Marlon Shevelew, senior attorney and property/consumer law expert at Marlon Shevelew and Associates says however, that where the CPA applies to the transaction, various provisions in the CPA, such as those prohibiting false, misleading or deceptive representations, as well as the automatic right to safe goods of good quality, coupled with the implied warranty of quality, as guaranteed by the Consumer Protection Act, will prevent a voetstoots clause from having much (if any) effect. “Indeed, the Consumer Protection Act states that defects include both patent and latent defects.”
Given the restrictions regarding the CPA, the Act will only replace the voetstoots clause and as such will have a limited application in property sales.
Unfortunately, many people do not fully understand the voetstoots clause, believing that because the property is sold ‘as is’, the buyer has no recourse if defects are found once the transfer has been effected. Again this is not the case.
“The voetstoots clause cannot be categorised as something which allows a seller to perpetrate fraud on the buyer, says Shevelew. “In our common law, the courts have already recognised that the voetstoots clause does NOT apply in such a situation. For example, in Van der Merwe vs Meads 1991 (2) SA 1(A) the court held that a seller is deprived of protection under the voetstoots clause in the following circumstances:
where the seller was aware of the defects in the property when entering into the contract; and
when the seller intentionally conceals the existence of the defect with the intention of misleading the buyer.
The buyer usually cannot demand, as a matter of law, that the voetstoots clause be removed, as it will truly be rare that the seller will be in the business of selling properties. To put this differently, rarely would sellers be classified as "suppliers" for purposes of the Consumer Protection Act.
However, Shevelew notes:
“It must be remembered that where the agreement contains a voetstoots clause, the buyer has a difficult burden of proof in showing that the seller had knowledge of the defect together with the intention to defraud. In past cases, the intention to defraud test was often easily negated by the seller. The buyer can always negotiate with the seller on the terms of the offer to purchase, and may, if the seller is open to it, have such clause taken out. In addition, making the sale subject to a suspensive condition that a favourable home inspection occurs, may also reduce the possibility of the buyer purchasing a defective property.”
Hundreds of properties change hands in South Africa every day and most buyers are undoubtedly happy with their purchases. However, buying anything, never mind a major purchase such as property based on the word of the seller is always going to be a somewhat risky business. Inserting a clause stating the sale is subject to an in-depth home inspection may well be the way to go to avoid a lengthy, costly legal battle.