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April 2022

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Is a Seller held liable to repair a leaking roof after the property is sold?

Is a Seller held liable to repair a leaking roof after the property is sold?

To understand which party is liable, one must appreciate the difference between latent and patent defects. A latent defect is not visible or can be discovered when inspecting the property. This type of defect impairs the use and enjoyment of the property. Typical examples of latent defects are leaking roofs, dampness and/or structural defects in the foundation, to name but a few.

On the other hand, a patent defect is visible when inspecting the property. Hence, the parties can discuss the options of who will attend to the repairs. The same may be negotiated between the parties, be it the Seller who repairs the patent defect or reduces the purchase price for the Purchaser to repair.

Thus, it is the latent defect matter that triggers the dispute between the parties should it arise. The common law position is as follows;

If the Seller gives the purchaser an express written warranty that the property is sold free from any defects, and after the sale is concluded, the purchaser confirms that there is a defect, the Seller can be held liable for the repairs. For example, if the Seller declared in the agreement of sale that the roof does not leak and after the sale the Purchaser experiences leaks in the roof, the Seller is held liable as there has been a breach of contract.

If the Seller misrepresents to the Purchaser regarding the property’s condition, the Seller can be held liable. For example, if the Seller is aware that the roof leaks and does not declare the same to the Purchaser, the Seller can be held liable, and the sale can be set aside, or the Purchaser may proceed with the sale and claim a reduction in the price for the damages.

One may ask, but what if the Seller did not know about the latent defect? The answer is yes, the Seller can be held liable if the latent defect existed when the sale was concluded between the parties.

But why is there a voetstoots clause in the sale agreement, which is supposed to protect the Seller by informing the Purchaser that he/she/they are purchasing the property as-is (voetstoots)? The voetstoots clause does not protect the Seller and does not exclude the Seller’s liability if the misrepresentation is proven; hence if the Seller was aware of the latent defect and did not disclose same to the Purchaser, the Seller can be held liable.

The Consumer Protection Act, which came into effect on the 1st of April 2011, states the Purchaser has to be informed of all details regarding the property that he/she/they are purchasing. Once the Seller expressly states what condition the property is in and the Purchaser expressly accepts the current state of condition of the property before purchasing the property, the implied warranty of the property’s condition falls away. The effect of the CPA has been that the voetstoots clause does little to protect the Seller when it is tomes to defects; hence the Seller is urged to declare all defects of the property to the Purchaser before concluding a sale agreement.

 

Reference List:

PRACTITIONERS GUIDE CONVEYANCING & NOTARIAL PRACTICE BY ALLEN WEST

CONSUMER PROTECTION ACT 68 OF 2008

 Source: Miller- Bosman- Le Roux

800 300 Prevance - Bridging Finance South Africa

The Seller passed away during the transaction. What now?

While concluding the sale of an immovable property, the seller will sign a power of attorney, which gives the attorney the obligation and authority to attend to the transfer of a certain property, which has been sold for a certain amount on behalf of the said seller.

Each power of attorney will differ in its content and the terms contained therein, but the basics will remain.

When the seller dies any power of attorney that may have been executed will automatically lapse. The legal principle behind it is that you, as the authorized person, can not act on behalf of a person that can not act for himself, which is common sense.

The same principle applies when a person becomes insolvent, or is so incapacitated that they can not make their own decisions.

In the latter case the Court may grant an order declaring the patient to be of unsound mind and as such incapable of managing his affairs and following this, to have a curator bonis appointed to administer the patient’s financial affairs.

The curatorship application is usually brought by a member of the patient’s family. However, any person who can show sufficient interest can also do so, for example, a friend or business partner.

It is important to keep your family up to date on powers of attorneys signed, so that someone can let the attorney know who is holding a power of attorney on your behalf.  If a transaction is registered after date of death on a power of attorney that has lapsed,  it can have far reaching consequences for the estate and the finalization thereof.

Source is Neuwmann Van Rooyen. https://www.nvrlaw.co.za/Home.aspx

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