Voetstoots Clause and Fraudulent Misrepresentation (The Bugle)

Having been involved in the property industry for twenty years, I have been exposed to several legal disputes over this time and find it interesting to read current case law relating to property transactions. Very often disputes will arise around the quality of a home and the latent defects that come to light after the parties have contracted. The old Roman-Dutch principle of voetstoots (buyer beware and that you buy the property as it stands with all its faults) is often at the heart of the claim. Sellers love to quote a voetstoots clause when faced with a complaint from a buyer, often not fully understanding the extent of liability that can be attached to them. 

We recently experienced a situation where a seller, fully aware of defects, attempted to hide behind a voetstoots clause contained in an agreement. Only after intervention from a third party attorney brought into the matter by the estate agency, was the matter resolved and the Seller forced to provide a measure of compensation. Recently the Supreme Court of Appeal considered this exact same principle of voetstoots in regard to the sale of a house with a thatched roof that leaked, as reported by attorneys Garlicke&Bousfield in their informative Law Letter publication.  Where a sale is subject to a voetstoots clause, the seller is not liable for latent defects, which manifest themselves after the sale unless the purchaser can show that, at the time of the sale, the seller was aware of the defect and fraudulently concealed its existence. The court found in this case that there were two defects in the roof, which were latent but that the seller was excused liability by virtue of the voetstoots clause because the purchaser had not proved that the seller had had knowledge of the defects and had concealed their existence. The seller had effected repairs to the roof prior to the sale. The purchaser then however raised the question whether the seller had knowledge that these repairs had been adequate to ensure that the roof would not leak. The seller contended he believed so as his insurance company had continued to provide cover and was satisfied with the repairs. To cover the purchaser from possible future problems, the parties had signed an addendum whereby the contractors guarantee would be transferred from the seller to the buyer. The evidence showed that the seller had known that this was a limited six-month guarantee and had in fact expired at the time of signing the addendum, thereby indicating that he did not believe the repairs to be adequate to stop the roof from leaking. Concealing the absence of a valid guarantee was deemed to be fraudulent and the seller thereby forfeited the protection of the voetstoots clause. Judgement was granted in favour of the purchaser for an amount of just under R450,000. 

The golden rule is to treat others as you would like to be treated. Sellers should not try to hide behind voetstoots clauses when it comes to latent or patent defects. Buyers would be well advised to employ and pay for professional Home Check inspectors to provide them with a detailed report prior to finalizing the sale agreement.

Published in The Bugle, 4 June 2014, Author: Andreas Wassenaar