THE CONSUMER PROTECTION ACT AND THE SALE OF IMMOVABLE PROPERTY
Since the commencement of the Consumer Protection Act No. 68 of 2008 (the Act) on 31 March 2011 we often find that clients wrongly believe that immovable property may no longer be sold “voetstoots”. This is however not the case and immovable property may still be sold voetstoots, provided that the Act is not applicable.
The Act will be applicable if the seller sells his property in the ordinary course of business, for example a developer, provided that the buyer is not a juristic person with an asset value or annual turnover exceeding R2,000,000 (two million rand). Should the Act be applicable, the property may not be sold voetstoots. The once off sale of your private residence will for example still be able to be sold voetstoots.
It will be prudent of parties to an agreement of sale to ensure whether the Act is applicable or not as this will have an material impact on their rights and obligations.
When a property is sold “voetstoots”, in short it means that the seller cannot be held liable for any latent or patent defects in the property, provided that the seller did not intentionally withhold any latent defects from the purchaser. The crux is however that the seller does not give any guarantees regarding the condition of the property and that the buyer accepts the property as it stands on date of sale.
The picture however changes considerably where the Act is applicable as the buyer has a right to receive goods that are reasonably suitable for the purposes for which they are generally intended, are of good quality, in good working order and free of any defects.
The Act creates a six-month implied warranty that the property/goods will comply with the abovementioned requirement and the buyer is entitled to request any defect(s) to be repaired, replaced or to be refunded, within reason. The buyer will however not be able to rely on said warranty if he (a) has been expressly informed that particular goods were offered in a specific condition and (b) has expressly agreed to accept the goods in that condition, or knowingly acted in a manner consistent with accepting the goods in that condition.
It is therefore recommended to compile and attach a comprehensive list of defects to the sale agreement, which in any event is now required by the Property Practitioners Act. The practical implication hereof is comparable with that of a property sold voetstoots as the buyer cannot hold the seller liable for the disclosed defects.
Article by Paul Delport, Senior Associate (LLB, Notary)
For more information, Paul can be contacted on paul@rgprok.com or 044 601 9900.
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Disclaimer
Nothing contained in this publication is to be considered as the rendering of legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel. This publication is intended for educational and informational purposes only.
