Put a Home Inspection Contingency in Your “Offer to Purchase”
Home Inspection Contingencies
If you don’t believe in having a home inspection you should realise that your investment is at risk. In reality, a home inspection contingency is your only safeguard where the voetstoots clause forms part of the sales price and contract.
In South Africa, the voetstoots clause is part of the purchase contract in most of the property sales. But, unfortunately, you will not find any home inspection contingencies in any purchase contracts.
You may not consider that a home inspection contingency is a big deal! In that case, ask yourself why a seller will refuse to consider your offer that contains a home inspection contingency. It has occurred to some of my clients! I told them to consider it a lucky escape!
In addition, a seller selling a house below market value most probably has serious defects. Don’t fall for reasons like the seller is leaving for overseas or retiring to the coast.
A home inspection contingency should be added as part of the purchase contract when you have a home inspection. It means you can cancel the sale or try to negotiate repairs based on the results of the inspection.
In most instances, you should negotiate for at least a week to conduct a home inspection. The time can be shortened or increased during offer negotiations.
An example of a home inspection contingency
“The Buyers’ offer is contingent upon a satisfactory inspection within 7 (or _____ ) working days. Upon receipt of the results of such inspection, the Buyers may request in writing at any time within the agreed period that the Sellers make certain repairs or that the Sellers reduce the sales price to compensate for such defect(s). Such a request to repair or reduce the price does not terminate the contract and the Sellers shall have _____ days from receipt of such request to agree to make such repairs or reduce the sales price. If the Sellers do not agree, the Buyers shall have _____ days to waive the contingency and accept the property “as-is” or to declare the contract null and void. “
The contingency expiry date
The minimum time period you should try and negotiate is 7 working days from acceptance of your offer. At a squeeze, 5 working days may be sufficient if there are no serious problems, but it puts a lot of pressure on everyone!
Setting the date that a home inspection contingency should be released depends on the contingency you negotiate with the seller. It may not automatically expire unless you take a specific action such as signing a contingency release. That is if a release is part of the contingency agreement. Therefore, if it expires before you have it inspected, you lose the right to have the home inspected.
When your sales contract has a home inspection contingency, it is important to conduct the inspection as soon as possible. I may recommend that you call a roofing contractor to do further investigation of a problem in the ceiling space. But, for example, you might have to contact several roofing contractors before finding someone available in the time frame you need.
Therefore, it is very important to keep the seller and agent in the picture of what is happening. Furthermore, you should advise the seller on your decision to continue or to negotiate a better sales price or whether you intend to withdraw from the purchase contract before the expiry date. If you don’t, you may have to honour the conditions of the sale.
Types of Home Inspections
A home inspection involves many components, which are primarily structural and visual. However, if I discover defects beyond my area of expertise, I will recommend that you consult an expert.
For example, if the home’s water pressure is low, I will recommend an inspection by a licensed plumber. There could be a blockage the water supply system, or the plumbing pipes could be corroded. I may not be able to identify such defects by noticing the low water pressure. If I recommend further inspections in the report, you may wish to call a specialist for advice.
This is also why an inspection contingency and the time period is so important! It gives you time for specialist inspections if they are required!
Specialist inspections may include any of the following:
Disclaimer: This inspection contingency article is intended for educational purposes only and does not constitute legal advice. Real estate procedures and documents may vary. Consult a real estate professional or lawyer in your area if you have specific questions about this subject.
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”.
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.
Property defects can affect the property sale. There is no guarantee that you won’t be buying a house with serious defects and maintenance problems. Buying the right home is an important investment for the future.
Firstly, conducting your inspections will help you weed out those properties from your consideration that have too many obvious defects. Following that, it is then a smart move to hire a home inspector to discover all the remaining property defects that need attention.
The most popular inspection is a comprehensive home inspection which covers everything from the boundary walls to the ridge of the roof of the house and all that is in between! The list below will take you to the different types of inspection offered:
Comprehensive home inspection (buyer’s, seller’s and homeowner’s maintenance)
Critical home inspection (roof, structure, doors and windows, electrical and plumbing)
Walk-through home inspection (comprehensive inspection without a written report)
Snag inspection (new homes)
Progress inspection (homes under construction – new and renovations)
How does the “Voetstoots” Clause affect property defects?
In South Africa, the “voetstoots” clause states that you are buying the property “as it stands“. This means property defects and all. Moreover, as the buyer, you have no claim against the seller if there are obvious (patent) property defects. An inspection of the property, by a suitably qualified professional, will reveal these patent and non-apparent defects (latent defects).
With latent defects, the seller only becomes liable for these defects if the seller is aware of them. However, the voetstoots clause in the agreement of sale does not take away the seller’s liability. Therefore, the seller is legally required to reveal any latent property defects he is aware of.
In order to find latent and patent defects, it is necessary to employ the services of a professional home inspector. Furthermore, any “Contract to Purchase” must contain an Inspection Contingency for you to be protected. The home inspector typically performs the inspection during the Home Inspection Contingency Period which you negotiated with the seller in your Offer to Purchase.
A home inspection is a visual examination of the home’s major structure, systems and components that are visible and safely accessible. InterNACHI-certified inspectors adhere to or exceed the standards of practice that outline what should be covered during a comprehensive home inspection, as well as what is excluded.
My inspections substantially exceed the Standards of Practice of the International Association of Certified Home Inspectors (InterNACHI). I provide you with a written report, which includes photos and recommendations, of my findings during the inspection. Read InterNACHI’s Standards of Practice to find out what is typically included and excluded in a home inspection.
The International Association of Certified Home Inspectors (InterNACHI) is the world’s largest trade organization of residential and commercial property inspectors. InterNACHIwas founded in 1990 and has more than 23,000 members. InterNACHI provides certification, training, benefits and professional support to its members. The InterNACHI® School is the only home inspector school accredited by the U.S. Department of Education.
InterNACHI is an organization of independent, professional home inspectors who conduct inspections according to the InterNACHI Standards of Practice and Code of Ethics. The standards and code prohibit engaging in conflict-of-interest activities that might compromise their objectivity.
All InterNACHI inspectors meet rigorous training requirements, including passing a comprehensive, technical exam within 1 year of joining InterNACHI. Mandatory annual continuing education is also required to retain certification and membership. This helps certified professional inspectors (CPI) stay current with the latest in technology, materials and professional skills.
What does a comprehensive home inspection include?
My comprehensive inspection and report cover the condition of all the home’s visible elements including defects.
On the exterior, this includes foundation and superstructure walls, roof and roof drainage. I report on the condition of windows, and doors and indications of moisture or water penetration. The report also includes the land grading around the home, walkways, steps, driveways, decks, patios, retaining and boundary walls, etc.
My inspection of the interior includes plumbing and electrical systems, the ceiling space and visible roof structure and insulation. I Inspect the walls, ceilings, floors, steps, stairways, railings, doors and windows as well. In kitchens and bathrooms, I inspect the countertops and cabinets, fixtures and fittings.
Buying a home could be the largest single investment you will ever make. Therefore, you’ll want to learn about the newly constructed or existing house to minimize unpleasant surprises and costly defects.
A home inspection will identify the need for major repairs or builder defects, as well as the need for maintenance. After the inspection, you will know more about the house, which will allow you to make decisions with confidence.
If you already are a homeowner, a home inspection can identify existing and future maintenance defects. The report will suggest preventive measures that might help you avoid costly future repairs.
If you are selling your home, a home inspection can advise you of repairs to defects that will put the house in better selling condition.
The inspection fee for a typical one-family house may vary geographically. Similarly, the inspection fee may vary depending on the size of the house, its age and possible optional inspections.
However, cost should not be a factor in deciding whether to have a home inspection. The sense of security and knowledge gained from an inspection is well worth the cost. In addition, the lowest-priced inspection is not necessarily a bargain. Use the inspector’s qualifications, including experience, training and professional affiliations as a guide.
Even the most experienced homeowner lacks the knowledge and expertise of a professional home inspector. Home inspectors are objective and highly experienced. In addition, home inspectors are familiar with the elements of home construction, proper installation, maintenance and home safety. They know how the home’s systems and components are intended to function together, as well as why they fail.
Above all, most buyers are not completely objective and unemotional about the house they want. In addition, this may affect their judgment. Therefore, for objective accurate information, it is best to obtain an impartial, third-party inspection by a professional home inspector.
Can property defects cause a house to fail a home inspection?
No. A professional home inspection is an examination of the current condition of a house. Therefore, it is not a bank appraisal, which determines market value. Moreover, it is not a municipal inspection, which verifies compliance with local and national building regulations. A home inspector, therefore, will not pass or fail a house, but rather describe its physical condition and defects. The inspector will indicate which components and systems may need major repair or replacement.
Typically, you contact me immediately after the contract or purchase agreement has been signed. However, before you sign, be sure to add an inspection clause in the sales contract. This addition makes your final purchase obligation contingent on the findings of a professional home inspection.
It is not a requirement that you be present for the inspection. However, it is highly recommended. Moreover, you will be able to ask questions and gain a better understanding of the home’s condition. Furthermore, this will give you insight into its potential sale points and defects. Additionally, you will gain information about the home’s maintenance, systems and components.
Depending on the home’s age and size, your home inspection may take up to 4 hours. However, additional ancillary services such as swimming pools, jacuzzies and lapas will increase that time. A comprehensive home inspection should not take less than 1⅟₂ hours.
No house is perfect. If I identify property defects, it doesn’t mean you shouldn’t buy the house. It means you will know in advance what to expect. Moreover, if you have budget constraints, or you want to limit future repair work, this information will be important to you. Furthermore, the seller may agree to make repairs if major problems are found or reduce the sales price.
If the house proves to be without major property defects, why did I really need an inspection?
Without a home inspection, how would you know there are no major defects? Once you have had your home inspection you can complete your home purchase with confidence. As a result, you’ll have learned many things about your new home from the inspector’s written report. Furthermore, you will have that information for future reference.
I offer home and commercial inspections in an inspection area which substantially covers a large portion of Gauteng. Specifically, this area includes most of Johannesburg, Tshwane, Ekurhuleni and a portion of North West Province.
Areas outside those mentioned may be too far from my office or not covered by my insurance company.
Furthermore, outside inspection areas will include additional costs such as travelling costs, time costs etc.
Please contact me to receive a quote for an outside inspection area.
Buying property with the “voetstoots” clause in the Offer to Purchase puts you at risk. As a result, you should have a home buyer’s inspection which is a comprehensive inspection or a critical inspection and report with marked photos of the defects!
At THE HOME DETECTIVE, I specialise in providing professional comprehensive home inspections for buyers. In fact, my detailed inspection report will help you to make an informed decision on whether to buy or not.
A timely home inspection can also save you expensive litigation post-purchase. Moreover, I am here to help you make the right purchasing decision. Unlike sellers and estate agents who do not have your interests at heart.
The condition of the property’s exterior space (stand and property walls)
Upon completion of the physical inspection of the property, I will compile an extensive and detailed home pre-purchase home inspection. The comprehensive inspection report will be available within 3 working days of the inspection.
I am an internationally certified home inspector. I work within the strict Standards of Practice and Code of Ethics of the International Association of Certified Home Inspectors (InterNACHI).
With my experience, I’m in a unique position to provide you with a highly professional, home buyers home inspection report. As a result, you can rely on the information in the comprehensive report before you buy your home.
I am passionate about helping people find a structurally sound home. Furthermore, I will ensure that you have as much information as possible about a property before you buy it. Therefore, this will make your purchasing decision easier and take the stress out of the transaction.
Also, my pre-purchase home inspection and the report will not cost you an arm and a leg. In short, my fee is a fraction of the purchase price of the property you wish to buy!