WHAT IS THE DIFFERENCE BETWEEN PROPERTY LATENT & PATENT DEFECTS?

Have you recently bought your dream house, only to discover that the walls are moist a few weeks later? Maybe the window was broken? Perhaps you are now in a situation where you have sold your house and must defend yourself against the buyer's unjustified claims of damages. The distinction between what constitutes a latent flaw and a patent one might just hold the key to your solution.

What can be considered a patent defect?

A property fault that should be obvious to a reasonable person upon inspection is known as a patent defect. Wall cracks, sagging gutters, shattered windows, and missing tiles are examples of patent defects. It is important to understand that the buyer has the responsibility to thoroughly evaluate the property before making a purchase and will be left with very little recourse if it is later asserted that they were unaware of obvious flaws. To be thorough, buyers could ask to look behind bigger pieces of furniture to check that the areas they block are free of flaws and are not hiding cracks or moisture. After thoroughly inspecting the house, it can then be discussed and agreed upon what defects will be at the seller’s expense to fix and what will be at the buyer’s own cost to address.

What can be considered as a latent defect?

A latent fault is one that would require specialised knowledge to detect as it would not be noticeable to the untrained eye upon casual inspection. Rising damp, broken pool pumps or geysers, rusty interior pipes, and leaking roofs are examples of latent defects in a property, some of which will be detected and will have to be addressed before the compliance certificates will be issued. At the time of concluding and signing the agreement of sale, the seller of a property has an obligation to disclose to the buyer any latent defects to the property of which they are aware. The buyer can then decide whether to go ahead with the purchase or insist that the seller address the defect before the sale goes through. However, if the seller was not aware of the defect and the buyer discovers it after the deal has gone through, the seller cannot be held liable for it.

What is the Property Defects Disclosure form?

On February 1, 2022, the Property Practitioners Act 22 of 2019 (Act) came into effect. The Estate Agency Affairs Act 112 of 1976 has been completely repealed by the Act. Real estate agents must receive a "disclosure form" from a seller before finishing a mandate and give it to a buyer before making an offer. According to Section 67 of the Act:

“(1) A property practitioner must:/p>

(a) not accept a mandate unless the seller or lessor of the property has provided him or her with a fully completed and signed mandatory disclosure in the prescribed form; and

(b) provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property.

(2) The completed mandatory disclosure form signed by all relevant parties must be attached to any agreement for the sale or lease of a property and forms an integral part of that agreement, but if such a disclosure form was not completed, signed, or attached, the agreement must be interpreted as if no defects or deficiencies of the property were disclosed to the purchaser.

(3) A property practitioner who fails to comply with subsection (1) may be held liable by an affected consumer.

(4) Nothing in this section prevents the Authority from taking action against a property practitioner or imposing an appropriate sanction.

(5) Nothing in this section prevents a consumer, for his or her own account, from undertaking a property inspection to confirm the state of the property before finalising the transaction.”

Who is responsible?

The seller of a property has a responsibility to disclose to the buyer any known defects in the property at the time of finalising and signing the offer to purchase. In the event that a flaw is discovered after the property has been sold, the onus is on the buyer to demonstrate that the seller knew about the flaw and purposefully/fraudulently concealed it from the buyer during the closing. The responsibility is not on the estate agent unless the seller told the agent and the agent did not disclose the information to the buyer or purposefully hid the information from the buyer.

What is the “voetstoots” clause?

It means that any structural flaws, whether obvious or not, will fall under the buyer's responsibility. In the simplest terms, it signifies that the buyer purchases the property "as is". The voetstoots clause, however, will not shield a seller from responsibility if the seller knew about the latent defect and purposefully kept it from the buyer.

Are you protected by the Consumer Protection Act?

Contrary to popular belief, the Consumer Protection Act (CPA) only applies if vendors sell property regularly or persistently promote themselves as sellers of property. While estate agents are covered by the CPA, the buyer would only have a claim against the agent under the CPA if he could show that the agent knew about the error and purposefully concealed the information. Buyers shouldn't rely on the CPA for protection because it so infrequently applies to routine real estate transactions.

Keeping a record of property defects

The property defects disclosure form can be useful for demonstrating which defects were explicitly communicated to the buyer. If the problems are noted, the seller will have good evidence to support the claim that the buyer knew about the defects and is not entitled to damages for concealment. It is also a good idea to list any flaws that the seller will fix before the buyer moves in as a way to safeguard the buyer from a seller who tries to invoke the voetstoots clause after the transaction has been completed or later retracts their assurance to fix the flaw.

Get further expert advice

By verifying that the house you buy is in excellent condition, an independent property inspector may help you avoid a lot of money and pain. Although your local RE/MAX agent is knowledgeable enough to offer buyers and sellers some broad guidance, it is preferable to obtain qualified legal assistance on this subject if problems do occur.