A recent judgment in the North Gauteng High Court underlines the fact that property sellers cannot rely on a voetstoots (as is) clause in their sale agreement to protect them against damage claims when they fail to disclose known defects in their properties.
The case involved the 2017 sale of a stand in Centurion which was later found by the buyer to have no approved building plans as had been agreed to in the sale, and to lie on unstable dolomitic ground that made it worthless from a residential point of view.
A long Court process then followed as the buyer tried to reclaim the purchase price, transfer costs and property taxes from the seller, who she claimed had failed to disclose these defects during the sale.
The seller claimed that he had obtained building plans and a geological report when he bought the property, but had never read them. He further claimed that the buyer was bound by the voetstoots clause in their sale agreement, which meant that the property was sold “as is” with all existing faults and defects.
The buyer maintained that the seller had intentionally concealed crucial information, and highlighted inconsistencies in his testimony during earlier court proceedings regarding his knowledge of the property’s defects, and the High Court ultimately ruled against him. He was ordered to repay the purchase price, 0,25% a year interest and the buyer’s legal costs.
The Court also specifically stated that “the voetstoots clause does not shield the seller from liability if they are found to have knowingly concealed defects from the buyer”.
This is of course consistent with several earlier judgments, and what it means for home sellers, in practical terms, is that “honesty pays”. Before marketing your home, your Chas Everitt agent will go through the property with you and ask you to fill out a disclosure form, in which you are asked to list any and all defects that you know about.
This list is then shared with prospective buyers as part of the sale agreement, precisely so they cannot say at a later stage that any known defects were purposefully hidden from them, by either the seller or the agent.
And it really is better to be completely forthright at this stage, and list everything from the dripping garden tap to the damp in a bathroom wall to the roof leak in the garage. Both buyer and seller will then have a chance to negotiate who will repair these defects and the costs of doing so, and to adjust the purchase price, if necessary, to everyone’s satisfaction.
Trying to hide defects, on the other hand, or deliberately omitting them from the disclosure list, is very likely to lead to disputes at a later stage, and quite possibly a protracted - and costly - court battle.
