Looking past the current debate on the ‘voetstoots’ clause in property sale agreements and whether it will still be allowed when the new Consumer Protection Act (CPA) comes into effect later this year, RealNet says there is a simple answer, and that is independent home inspection.
Jan Davel, chief operating officer and director of the estate agency group, says that in the US and UK, a property being sold must pass a home inspection or “appraisal” by an independent, accredited expert for the prospective buyer to obtain a home loan.
“And although this system was originally introduced to give the lenders peace of mind, a satisfactory appraisal is also of great benefit to the buyer - and to the seller, who then doesn’t have to worry about post-sale comebacks from buyers who are unhappy with their choices.”
He suggests that a similar system should be introduced in SA, where most residential property sale agreements still contain a standard ‘voetstoots’ clause that means the property is being sold ‘as is’ and without any guarantees.
“This clause is seen as being all in favour of sellers, as it protects them from liability for latent or hidden defects, but things are seldom so clear-cut. Buyers can still sue for damages if they believe there was deliberate non-disclosure of latent defects by sellers, and they can and do try other ways to get deals cancelled if they feel cheated. These could include refusing to pay deposits or occupational interest, and dragging out transfers by taking weeks to sign the necessary documents.”
On the other hand, says Davel, it must be acknowledged that the ‘voetstoots’ clause has sometimes been abused by unscrupulous sellers or their agents, and that there is a case to be made for protecting buyers against this possibility, using the Consumer Protection Act.
“The trouble is that it seems at this stage as though the new legislation will only apply to ‘primary suppliers’ such as developers, speculators and institutions with large property portfolios, whose business is trading in property. It won’t apply to individuals selling their own homes in one-off transactions, who will still be able to put ‘voetstoots’ clauses in their sale agreements.
“And to make matters worse, it is not at all clear whether estate agents, whose normal course of business is to be involved in property transactions, will be regarded as having the same liability as primary suppliers, or whether they will be seen as third party facilitators of the one-off transactions where voetstoots could still apply.”
However, he says, the CPA does make clear provision for the new National Consumer Commission to accredit consumer protection organisations.
“And we think in this context it should look at licensing professional home inspection organisations to provide comprehensive and unbiased reports that would create total transparency between home buyers and sellers, and eliminate the ‘voetstoots’ controversy altogether.”
