In rejecting an appeal against an insurance company for defective plumbing the Ombudsman for Short-Term Insurance, Dennis Jooste has warned home buyers that the onus remains on home buyers to satisfy themselves that the property was not defective in any form.
Jooste dismissed a buyer’s claim against Absa for leaking water pipes in a recently purchased house. He said when property is bought voetstoots claims for defects which were discovered by the buyer after transfer should be directed against the previous owner and not against the new owner’s insurance company.
“Your insurance company will not cover you for maintenance”, he said. Buyers had a responsibility to conduct regular maintenance checks and to do the necessary maintenance.
This aggrieved buyer believed that his Absa home owner’s policy should pay for the replacement of the leaking pipes, because the property was bonded with Absa. The buyer said he was unaware of the plumbing problem when he bought the house.
However, the ombudsman said that even though Absa may have assessed the property before granting a bond, the bank’s assessment was solely to establish that the property offered sufficient security on the bond. Jooste added that it was not the responsibility of the lending bank to assess and determine the structural integrity of a home.
John Graham of HouseCheck said more and more South African home buyers were realizing that they could not rely on bank valuators to protect the buyer from the risk of buying a home with undeclared problems. Graham said HouseCheck home inspection reports documented all observed defects. HouseCheck also provided buyers with an evaluation of the seriousness of each defect, together with an estimate of the cost of repair.
Graham said there was now a fast-growing South African trend for buyers to protect themselves via a professional home inspection report. With the pending publication of a new property law, the Property Practitioner’s Bill, this trend to using home inspection services would accelerate. Under the proposed new law estate agents would be compelled to advise buyers of the risks of buying voetstoots in the absence of the buyer obtaining a home inspection report.
- The Ombudsman’s determination can be found here.