Consumers and the Property Practitioners Bill

Has the Property Practitioners Bill missed the point?

consumers

Are consumers offered more protection?

Parliament passed the new Property Practitioners Bill on Tuesday 4th December 2018. This bill has been on the cards before 2011!

The Bill was supposed to finally provide buyers (consumers) more protection in the secondary housing market.

However, it appears the Minister of Human Settlements and his staff and the National Assembly totally missed the point!

Here is that portion of the Bill:

CHAPTER 10

CONSUMER PROTECTION

Mandatory disclosure form

  1. A property practitioner –
    1. may not accept a mandate unless the seller or lessor of the property has provided him or her with a fully completed and signed mandatory disclosure in the prescribed form; and
    2. must provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property.
  2. The completed mandatory disclosure form signed by all relevant parties must be attached to any agreement for the sale or lease of property and forms an integral part of that agreement, but if such a disclosure form was not completed, signed or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.
  3. A property practitioner who fails to comply with subsection (1) may be held liable by any affected consumer.
  4. Nothing in this section prevents the Authority from taking action against a property practitioner or imposing an appropriate sanction.
  5. Nothing in this section prevents a consumer, for his or her own account, from undertaking a private property inspection to confirm the state of the property before finalising the transaction.

This is the protection this Bill offers to buyers (consumers) who buy properties from sellers.

So what has changed? Continue reading “Consumers and the Property Practitioners Bill”

The Voetstoots Clause

voetstoots clause

The Infamous Voetstoots Clause!

voetstoots clause in the estate agent's offer to purchase
The seller does not have your interests at heart! The Voetstoots Clause protects the seller, not YOU! Do the wise thing! Put an inspection contingency clause in the Offer to Purchase which says the offer is dependant on a satisfactory home inspection. Then, have a home inspection to protect yourself!

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Hidden defects could result in expensive repairs!

Be careful with the voetstoots clause! You are not protected from defects by the Consumer Protection Act with the voetstoots clause in an Offer To Purchase unless you are buying from a developer or builder. All the offer’s to purchase I have come across of all from estate agents and lawyers have the voetstoots clause. You can have the estate agent remove the clause but your offer will most likely be rejected!

In certain instances of concealed defects, you have recourse to the law. A legal determination will need to be made as to whether a defect was deliberately concealed or not. This will determine who is liable for costs. This can be expensive!

But you can reduce the risk with the Voetstoots clause if you make yourself aware and do the following:

Voetstoots and Patent and Latent Defects

A patent defect is clearly visible upon inspection. This may include items such as a crack in a wall or window, chipped plasterwork etc. The offer to purchase should clearly state who is responsible for repair or replacement.

A cursory inspection does not easily pick up a latent defect, e.g. a faulty geyser, a damp area concealed behind furniture or fresh paint, or a leaking roof.

Common law states that the seller is responsible for all latent defects for a period of three years from the date of sale.

The seller should supply all warranties and documentation of repairs and maintenance on the transfer of the property. Make sure that you are aware of all patent defects!

The seller and the voetstoots clause

Sellers stipulate that the property is for sale ‘as is’ (“Voetstoots”) in the belief that they can avoid expensive repairs. However, the seller remains responsible for any deliberately concealed latent flaw or defect.

The difficulty arises in that the burden of proof lies with you, the buyer, as to whether the seller knew, or ought to have known of the latent defects. This also determines whether you can cancel the contract, or claim some repayment from the seller.

You and the voetstoots clause

The offer to purchase document or seller’s disclosure should contain all detected faults. The fault records must also state which party will be responsible for repairs.

You can insist on certain guarantees, e.g. under ‘Special Conditions’. For instance, you can stipulate that; “The Seller warrants that the swimming pool on the property is not leaking at the date of signature hereof by him”.

For your own protection, you should negotiate a Home Inspection Contingency with the seller.

The estate agent (property practitioner) and the voetstoots clause

An important document is the “Seller’s Property Disclosure” which should form part of the offer to purchase. Sellers should disclose problems in the house to the best of their belief and knowledge. However, what the seller “believes” and what is actually true often diverges a lot!

The estate agent is a facilitator and not a party to the contract. Therefore, you can only prosecute an estate agent in terms of the Consumer Protection Act. This applies if the agents ‘supply’ of service was in contravention of the CPA.

If you are unhappy with the service given by the estate agent or estate company, or you suspect that they have violated either the law or the code of conduct governing the industry, it is always better to try and resolve the problem with them first. If you are still not happy you can approach the Estate Agency Affairs Board. The property practitioner’s ombudsman still has to be appointed as required by the Property Practitioners Act.

Protection against the voetstoots clause

With a home inspection report by THE HOME DETECTIVE, you get an accurate, comprehensive description of the true condition of the home you intend to purchase. You, the buyer, the seller, the estate agent and conveyancers can thus be a party to a fair deal.

The cost of the inspection is normally for your account.

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 Inspected Once, Inspected Right!®

SEE WHERE I INSPECT IN GAUTENG!

THE HOME DETECTIVE » consumer protection act

Voetstoots clauses are still being used in 98% of Home Sales Contracts

Voetstoots Clauses

voetstoots clauses

Read your offer to purchase carefully!

Beware of voetstoots clauses!

If you believe that the voetstoots clause is no longer applicable to home sales, you are mistaken. Estate agents and home sellers are using the voetstoots clause in 98% of the “offer to purchase” agreements. Furthermore, the voetstoots clause protects both the seller and the agent in case of legal ramifications for defects. The seller is not selling his home in his normal course of business. As a result, the Consumer Protection Act does not protect you!

In conclusion, just imagine what is wrong and can go wrong with the house you just bought if you don’t take the correct action!

Get a FREE Quote NOW!

 Inspected once, Inspected Right!®

THE HOME DETECTIVE » consumer protection act

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