Almost every Agreement of Sale/Offer to Purchase relating to the sale of immovable property contains a clause stating that the property is sold “voetstoots” (as is/as it stands). What is the effect of such a clause?
Under the common law the Seller is responsible for latent defects which exist in immovable property (and movable property) at the time of the sale, even if he was not aware of the existence of the defects. The Purchaser accordingly has a claim against the Seller in respect of such latent defects. A latent defect is a defect which destroys or impairs the usefulness of the property sold, and which would not be visible to a reasonable person who carries out a careful inspection of the property.
Examples of latent defects are structural defects, dampness and leaking roofs (provided the defect is not visible). Thus, if an Agreement of Sale relating to the sale of property does not contain a “voetstoots” clause, the Seller will be responsible to the Purchaser for any latent defects which are discovered after the sale if the Purchaser can prove that they existed at the time of the sale. Briefly and simply stated, the Purchaser has two possible remedies: (a) he can claim either cancellation of the sale, or (b) he can claim a reduction in the purchase price depending on the seriousness or extent of the defect. As a general rule the Purchaser can cancel the contract if a defect is so serious that he can prove that a reasonable man would not have bought the property had he known about the defect – or he can claim a reduction in the purchase price if the extent of the defect is such that, objectively, a reasonable man would still have purchased the property but would have paid a lesser price for it had he known about the defect at the time of the sale.
If an Agreement of Sale contains a “voetstoots” clause then the legal position set out above is completely changed. The common law is amended and the effect of the clause is that it excludes a Seller’s liability for latent defects. In other words, when an Agreement of Sale contains a “voetstoots” clause the Purchaser has no claim against the Seller in respect of latent defects, unless the Purchaser can prove that the Seller was aware of the defect at the time of the sale and concealed its existence from the Purchaser with the intention of defrauding him.
For example if a Seller knows that a roof leaks and covers up evidence of the leak, the Purchaser will have a claim against him in respect of such a defect if he can prove the requirements set out above. In view of the above, Purchasers would be well advised to inspect a property carefully and give attention to aspects like structural soundness of the buildings, condition of the roof, whether building plans have been approved etc.
A latent defect should be distinguished from a patent defect. A patent defect is one which is clearly visible to any reasonable person who conducts a careful inspection of the property.
(Disclaimer: This article is for information purposes only and do not constitute legal or other professional advice)
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