One of the first articles that I wrote for this newspaper, which appeared in the Property Post of 2 August 2003 dealt with “voetstoots” sales and latent defects (this earlier article can be viewed on my firm’s website www.wilsonmcwilliams.co.zaand contains an explanation of the terms “voetstoots” and latent and patent defects.
Subsequent to the above article there has been another High Court case relating to this topic. The facts of this case were briefly as follows:
The sellers sold a house to the buyers “voetstoots”. After taking transfer the buyers wanted to do extensions and the builder they intended employing pointed out a crack in one of the external walls. An engineer’s report revealed that the foundations were so unstable (due to the fact that the house had been built on uncompacted sand filling) that the house constituted a potential danger to the occupants. In fact the defects were so serious that two engineers suggested that the house be demolished.
On discovering these facts the buyers sued the sellers for cancellation of the contract and repayment of the purchase price.During the court case the following facts were established:
(a) The defects (unstable foundations and cracks in the walls) constituted latent defects.
(b) The sellers were aware of the defects at the time of the sale and had previously had to effect extensive repairs to numerous cracks in the walls.
(c) The sellers failed to disclose the defects to the buyers. In fact the buyers had specifically asked the sellers whether they were aware of any defects and informed them (the sellers) that they (the buyers) intended effecting extensions but the sellers had told them that the house was free from defects.
After taking all the facts into consideration the Court held that in this instance the sellers could not rely on the fact that the sale was “voetstoots” to avoid liability for the latent defects. The Court stated that the sellers in this case had a duty to disclose the defects of which they were aware to the buyers and that their non-disclosure had been accompanied by fraudulent intent. The Court ordered the contract cancelled and ordered the sellers to repay the purchase price to the buyers.
Although the buyers were successful in the above case it should be noted that each dispute of this nature will be judged on its own facts. The general rule with regards to a seller’s liability for latent defects in respect of “voetstoots” sales is that a seller cannot be held liable unless the buyer can prove that the seller was aware of the latent defect at the time of the sale and “designedly concealed” the defect or “craftily refrained” from informing the buyer of the defect with the intention of defrauding the buyer. Mere silence (i.e. non-disclosure of the defect) on the part of the seller is not necessarily enough. The buyer must show fraud on the part of the seller. This is often very difficult and buyers would be well advised to observe the Latin maxim ofcaveat emptor: let the buyer beware.