Patent and Latent Defects

The principle of Voetstoots came about due to the old principle, which was quite common in law, that the seller guarantees to the purchasers that there are no defects. Due to this heavy burden that is placed upon the seller the principle of Voetstoots was incorporated in the purchase agreements. One of the most common issues lawyers and conveyancers have to explain and determine is the application of the Voetstoots clause and also how to explain same to the public in layman’s terms.

The voetstoots clause is a provision in a sale agreement which stipulates that the purchaser buys the property from the seller as it stands and thereby indemnifying the seller against claims for damages in respect of any defects on the property whether patent or latent. However this cannot be done and dusted so easily.

First of all, we must look at the CPA (Consumer Protection Act). Purchasers incorrectly believe that the CPA gives everyone certain rights which is not entirely correct. The main purpose of the CPA is to protect the consumer in the commercial world but not all the transactions fall within the scope of the CPA. Only those transactions which happens in the normal course of business is regulated by the CPA. In other words when Mr Joe Soap buys a property from Mr General Public the CPA will not be applicable. Only Developers and Investors will be affected by the CPA. The relationship between the Agent and the Seller / Purchaser is also regulated by the CPA but only as far as the marketing is concerned. In the physical transaction the agent remains only the agent.

When the Voetsoots clause is applicable  it is important that you must distinguish between what are the Latent and Patent defects.

Patent Defects are those defects that can be seen with the naked eye or can be ascertained by conducting a reasonable inspection of the property. This can include broken windows, damp, defective electrical appliances and even the incorrect zoning or non-approved plans of the property and leakage of the irrigation system. A purchaser has a legal obligation to conduct a thorough inspection of a property to establish any patent defects before making an offer. If a purchaser neglects to do the required inspection, it is presumed that he/she is aware of all the patent defects and that he/she is satisfied to buy the property in that condition. Neither a seller nor an agent has any obligation to disclose any patent defects or inspect the property on the purchaser’s behalf. If a purchaser is not satisfied, he/she should address the defects in the offer to purchase.

Latent defects to a property are those defects that cannot be seen with the naked eye or ascertained by conducting a reasonable inspection of the property. Latent defect: a defect in an article sold that is not apparent after ordinary inspection by a ‘reasonable man’. This can include roof leakages, underground termites, an incorrectly installed geyser, and dampness behind a cabinet. Latent defects are defects which only an expert could discover or defects which cannot be discovered by an ordinary person during a reasonably thorough inspection, for example, rising damp in a house. Faults that are not immediately obvious and are hidden from view. These include faulty pool pumps and geysers, rusted internal pipes, leaking roofs (except where strain marks make the leak obvious) and defects that have been concealed such as dampness behind a cabinet. The test is what could not normally be seen on reasonable inspection.

Where there is some defect in the house, which is not apparent on a careful inspection, the seller is liable for those defects if he or she knew about them. The voetstoots clause in the agreement of sale will not take away the seller’s liability. In other words, the seller has a duty to reveal to the buyer any latent defects. In such an instance, the seller may be called upon to refund part of the purchase price or even to accept cancellation of the entire sale, depending on the nature or extent of the defect.  If a property is offered and sold in the condition as it stands (‘voetstoots’), it means that the seller does not guarantee the absence of latent defects.

The purchaser will then bear the risk and costs of repairing the latent defects unless the purchaser can prove the seller had prior knowledge of the latent defects and fraudulently omitted to disclose it before concluding the agreement. Latent defects or hidden damage are defects to a property that are not generally discoverable by a prospective purchaser on a reasonable inspection and ordinary vigilance.

The fear of not selling a house or achieving the desired asking price should not deter a seller from making a full disclosure of all defects, patent or latent, whether the seller considers them significant or not, as the failure to do so could end up costing more in the long run. Disclose, disclose, disclose.