Let the home buyer beware

It is probably a good thing that most aggrieved South African home buyers who think that they have been cheated by a seller, simply don’t have the money to take the seller to court, says John Graham, CEO of home inspection company HouseCheck.

Graham says that the voetstoots clause provides such effective and unfair legal protection for home sellers that even if the disgruntled buyer can find the money to sue the seller, the chances are very good that the buyer will eventually lose the case and be stuck with the seller’s legal costs also.

Senior Cape attorney, Grant Gunston, says a Supreme Court of Appeal decision in the case Odendaal v Ferraris has strengthened the position of the property seller when challenged by a buyer on the voetstoots clause
The Institute of Estate Agents website reports that the judge ruled that a buyer suing a seller for non-disclosure of a latent defect has to be able to show not only that the seller was aware of the defect but that the seller deliberately avoided disclosing it with the intention of defrauding the buyer. This, said Gunston, underlines and reinforces the long held understanding that the voetstoots clause provides strong protection for sellers.

“In this particular case, the buyer sought compensation for the fact that certain alterations had been carried out without the plans being approved by the municipality. However, notwithstanding non-disclosure of this fact to the buyer, the seller was exonerated because the court held that she had not withheld the information with the intention to defraud the purchaser. The ruling once again places a greater onus on the buyer to investigate the property thoroughly,” said Gunston.
Pretoria attorney Martin Potgieter is quoted in Rapport of 12 August 2012 as saying the voetstoots concept has never been more controversial. This was because the Consumer Protection Act did not apply to private once-off sellers of the family home. While the CPA eliminates the protection of voetstoots for developers and other professional property sellers, voetstoots remains an effective tool to protect private once-off sellers.

“Voetstoots cases crop up again and again in South African legal history,” said Gunston. “(This case) does give a clear warning to buyers and their lawyers to check the conditions of a prospective property purchase thoroughly and if they are concerned add clauses to the deed of sale to protect the buyer.”

Graham says that the only practical way for home buyers to protect themselves is to insist of a home inspection report so that home buyers signing a voetstoots clause actually know what the “as is” condition of the house is.

“It continues to amaze me that so many estate agents embrace the essentially immoral position of getting buyers to accept a voetstoots clause, which protects the seller, without also counselling the buyer to protect themselves via a home inspection clause.

“I am sure most estate agents are not unethical but are basically honest people who just haven’t thought through the consequences of their business practices”, says Graham.
“Just because the use of the voetstoots clause has been around for generations does not mean that it remains acceptable to use this clause without the balancing provision of a home inspection clause.

“The estate agency industry needs to move with the times”, concludes Graham. “In this age of consumer rights and transparency the estate agent and their principals need to get serious about levelling the playing fields between seller and buyer. The entrenched business practices of the South African real estate industry are essentially immoral and plain wrong as regards the use by the average estate agent of the voetstoots clause.”

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