No more hiding behind the "voetstoots" clause (Micel Schnehage 04 April 2011)

6 Apr 2011

JOHANNESBURG - Property developers who have in the past delivered sub-standard products and gotten away with it, relying on the protection of the "voetstoots" clause, will no longer have that shield, in terms of the new Consumer Protection Act (CPA).

This clause, which has been a part of business and contracting since time immemorial, is a common law principle which protects the seller by excluding his liability for latent defects. In terms of common law the seller will be responsible for latent defects in the absence of the clause. In the past some unscrupulous property developers have hidden behind the voetstoots clause, by saying for instance that there was no defect when the property was sold, and therefore any defect which becomes apparent later is not for his account.
Michelle du Plessis of legal firm Deneys Reitz says the implication of the CPA on the real estate sector is that if a property reveals a material defect within six months of transfer, the purchaser can choose to either return it and get a refund, to insist that the seller repair the defect, or that the seller replace it with another property. In other words, a seller can be forced to take back a property up to six months after transfer.
It is important to note that the CPA does not apply to all sales of property. A one-off sale, for example, will not fall under the CPA and therefore parties to such sales are free to continue using voetstoots clauses. "It is definitely a good idea, if you're a seller, to include a voetstoots clause in a deed of sale," Du Plessis says.
Du Plessis says there are exceptions to the rule: "If the purchaser has been expressly told that a property is offered in a specific condition and he accepts it in that condition, he can't later come back and allege the goods are defective or not suitable for his purposes". Therefore, if a purchaser has taken note of a defect in a property, he cannot change his mind three months later and tell the developer he no longer finds it acceptable.
She explains further: "The public should be made aware that if they buy a property from a developer, the developer can no longer hide behind a voetstoots clause. If there is a material defect in the product delivered, the consumer has rights. Developers will have to take stricter control over the entire construction process and also make sure they build a good product, otherwise they might find themselves being forced to take back that property and refund the purchaser."
The section in the Act which gives purchasers the right to return defective goods states that a purchaser/consumer has the right to receive goods that are reasonably suitable for the purpose for which they are generally intended, are in good working order, of good quality and defect-free. Du Plessis, says the term "defects" in that portion of the Act, is specifically limited to material imperfections in the manufacture of the goods which make it less acceptable to the purchaser. The section cannot be used against a seller / developer if the defect is minor, like a cracked tile or poor paintwork.
"The section specifically says it doesn't matter if the defect is latent or patent (obvious) or if the purchaser could have detected it before delivery... the purchaser is still entitled to expect good quality, defect free goods," Du Plessis said.
She says although the provisions of the CPA may appear harsh in how they will affect property developers, we must remember that we are all consumers, and will all ultimately benefit from the Act too.
Write to Micel Schnehage: micel@moneyweb.co.za