Property transactions are complex and this was brought home recently when doing an inspection for a client. A young couple had bought a place from a developer off-plan. The developer built the house, and by and large the workmanship was good.
The experience however, was not.
Normal tensions between the builders promises and clients expectations were at the heart of the unhappiness. The clients were unhappy because they only were able to take occupation three months after the promised completion date. The developer wanted the new owners to sign the bank’s “happy letter” prior to completion of the property and the new home owner rightly refused. I believe there were threats of physical assault exchanged. Not too pleasant.
But the builder/developer knuckled down and in the last month got everything completed. The owner signed the happy letter, the municipal building inspector issued the Certificate of Occupancy, required in terms of the National Building Regulations and Building Standards Act, and the new owners moved in.
The development contract allowed for the new owners to point out any defects within 90 days.
There were a few issues.
Some minor settlement cracks, some penetrating damp which was all duly reported to the builder.
The owners then asked HouseCheck to give the building a once over so that they could report any defects they did not know about or were not qualified to detect.
HouseCheck found that the geyser support system wasn’t adequate and that the provisions of SANS 10400-XA (Energy efficiency in buildings) were not complied with; in that the builder / developer had not installed any insulation in the roof cavity. This is a requirement on all new homes built after 2011.
The developer rejected the claim from the owners on the basis that the building inspector had issued a certificate of occupancy and therefore the building was deemed to be compliant.
Creswell Basson, the Executive Director of NABISA (National Association of Building Inspectors of South Africa), confirmed that under the National Building Regulations and Building Standards Act 103, (103 of 1977), as amended. (NBRBSA). Once a Building Control Officer, appointed by the local authority in terms of Section 5 (1) and futher delegated under Section 28 (4) of NBRBSA, issues a “certificate of occupancy” it cannot be withdrawn and or be revoked by the Municipal Council. The completed administrative action under delegation is referred to as “functus officio” of which, the only legal remedy to negate the certificate, is to get a High Court order, to set the certificate of occupancy issued aside. A legal process most likely to cost around hundreds of thousands of rand, big sums of money for first-time home owners to have to come up with.
You would think that the Act would provide protection to consumers when spending all this money on a property. But unsuspecting consumers are prejudiced all the time. The new Property Practitioners Bill (PPB), when enacted (it’s on the State President’s desk awaiting signature) will provide consumers with some relief. The PPB provides for an ombudsman to deal with issues such as this. But as things stand property consumers have little effective protection.
Our thoughts were that this was immoral so we approached one of South Africa’s top property lawyers, Cilna Steyn the managing director of SSLR Incorporated, for her opinion. Watch the video below to see what she says.
Let the buyer beware
Our unhappy couple may be able to get some relief from the Consumer Protection Commissioner, because they have bought the property from a developer and the Consumer Protection Act (CPA) therefore applies. It is only on secondhand properties, which can be sold voetstoots, that the CPA does not apply.
But the moral of this unhappy story is that in South Africa the old Roman Dutch dictum of “let the buyer beware” applies strongly.