Category Archives: Selling of property

Verkopers se beskerming beperk onder voetstoots klousule

Delport_marchVerkopers se beskerming onder die voetstootsklousule in ‘n koopkontrak vir die verkoop van onroerende eiendom, is dalk nie so “absoluut” soos sommige mense dink nie. Dit bly steeds die verkopers se plig om alle latente (verborge) gebreke in die eiendom aan voornemende kopers uit te wys. Verkopers se versuim om hieraan gehoor te gee, kan hulle duur te staan kom, soos in die onlangse saak Banda & Fynn vs Van der Spuy (781/2011) [2013] ZASCA 23 (22 Maart 2013) wat in die Appèlhof beslis is.

‘n Latente gebrek is byvoorbeeld ‘n lekkende dak of ‘n warmwatersilinder wat probleme veroorsaak, m.a.w. enige fout wat nie met die blote oog gesien kan word nie. Voornemende kopers sal byvoorbeeld nie gedurende die ‘droë’ maande watermerke op ‘n plafon kan sien as bewys van ‘n lekkende dak nie.

In die bogemelde saak het die verkopers nagelaat om die kopers in te lig oor die werklike skade wat aan hulle woning se grasdak aangerig is. Die verkopers het herstelwerk aangebring nadat hul bewus geword het van die lekkende dak. By verdere ondersoek deur kenners is egter vasgestel dat die oorsaak van die lekkasies tweevoudig was. Eerstens was die houtpale wat die grasdak ondersteun het onvoldoende om die gewig van die dak te dra en het dit veroorsaak dat die dak stelselmatig inmekaarsak. Tweedens was die betrokke woning se dakhelling slegs 35 grade, wat veroorsaak het dat reënwater in die dak insyfer en die dak dus gouer laat verrot het.  Die kenners het getuig dat die helling van ‘n grasdak minstens 45 grade moet wees vir water om van die dak af te kan vloei. Die aanvanklike herstelwerk was dus nie voldoende om die lekkasie te verhoed nie. Die kopers het eers ná registrasie van die eiendom op hul naam agter die kap van die byl gekom en die verkopers moes opdok om die dak te herbou, aangesien die probleem nie permanent opgelos kon word deur slegs herstelwerk aan te bring nie. Alhoewel die verkopers nie van die groter probleem (die onvoldoende helling van die dak) bewus was nie, is hulle steeds aanspreeklik gehou aangesien hulle bewus was van die feit dat die herstelwerk nie die probleem permanent sou oplos nie.

Patente gebreke, aan die ander kant, bly steeds die koper se verantwoordelikheid.  Voornemende kopers kan dus nie terugsit en aanvaar dat, indien gebreke na okkupasie van die eiendom opduik, die verkopers aanspreeklik gehou sal word nie. Patente gebreke word gedefinieer as gebreke wat sigbaar is tydens ‘n gewone ondersoek.* ‘n Voorbeeld van ‘n patente gebrek is krake in ‘n muur. Dit is voornemende kopers se plig om verkopers uit te vra oor die stand van sake en waarborge van die verkopers oor gebreke in die eiendom op skrif te kry.

Daar rus dus ‘n wedersydse verantwoordelikheid op kopers en verkopers rakende gebreke in ‘n eiendom. Verkopers moet eerlik wees oor enige latente gebreke en kopers moet, wanneer hulle ‘n potensiële woning besigtig, uitkyk vir patente gebreke. Dit is egter wys uit ‘n verkoper se oogpunt om eerder oor ‘n verminderde koopprys met kopers te onderhandel weens gebreke in die eiendom, as om moontlik ná registrasie van die eiendom deur die kopers aanspreeklik gehou te word vir herstelwerk wat groot finansiële implikasies kan hê.

Verwysings:
Banda & Fynn vs Van der Spuy (781/2011) [2013] ZASCA 23 (22 Maart 2013)
*Dictionary of Legal Words and Phrases, 2nd edition, Claassen

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

Seller’s protection under voetstoots clause limited

Delport_marchA seller’s protection under the “voetstoots” clause in a deed of sale for immovable property is not as “absolute” as some might think. It is still the seller’s duty to inform prospective purchasers about all latent (hidden) defects in a property. A seller’s failure to do so could cost the seller in the long run, as per a recent ruling by the Supreme Court of Appeal in Banda & Fynn vs Van der Spuy (781/2011) [2013] ZASCA 23 (22 March 2013).

Examples of latent defects are a leaking roof or a faulty geyser. It basically includes any defects that cannot be seen with the naked eye. Prospective purchasers will, for example, not see water marks on a ceiling resulting from a leaking roof in the “dry” months.

In the abovementioned case the sellers failed to inform the purchasers about the true extent of the damage to the property’s roof. The sellers were aware of the fact that the roof leaked and had some repairs done to it to try and fix the problem. On closer inspection by specialists it was found that the cause of the leaks were twofold. Firstly, the wooden roof poles were inadequate to properly support the weight of the thatch roof and resulted in the gradual sagging of the roof. Secondly, the pitch of the property’s thatch roof was only 35 degrees and not 45 degrees as it should be, which would have at least ensured that rain water would run off the roof. The specialists testified that due to the pitch of the roof being 35 degrees, water ran into the roof and caused the thatch to rot more quickly. It was found that the initial repairs were therefore not sufficient to stop the roof from leaking in future. The purchasers only discovered this after registration of the property and the sellers had to fork out to replace the roof, as the problem could not be permanently solved by doing repairs to it. Even though the sellers were not aware of the bigger problem, namely the incorrect pitch of the roof, they were still held liable because they were aware that the repairs which they had done were not adequate.

On the other hand, patent defects are still the purchaser’s responsibility. Prospective purchasers cannot sit back and think that if any problems occur after occupation, the sellers will be held liable. A patent defect is defined as “one which will be apparent on an ordinary inspection”*. An example of a patent defect will be a crack in a wall which shows through the paint. It is a prospective purchaser’s duty to ask the sellers about such defects and get all guarantees from the sellers in writing.

It is clear that a mutual responsibility rests on sellers and purchasers regarding defects in a property. Sellers should be honest regarding latent defects and purchasers should be vigilant, when viewing a property, for any patent defects. It will be wise for sellers to rather negotiate a lower purchase price due to defects in a property, and to disclose them to the purchaser.  Failing to be honest with the purchaser could have huge financial implications for the seller after registration of the property.

References:
Banda & Fynn vs Van der Spuy (781/2011) [2013] ZASCA 23 (22 Maart 2013)
*Dictionary of Legal Words and Phrases, 2nd edition, Claassen

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

Sale of immovable property and the National Credit Act

02_BIt often happens during a sale of immovable property that the parties agree to a deferred payment of the purchase price. The purchaser will then pay the purchase price in instalments and the seller will charge interest on the outstanding amount from time to time. Sometimes the parties even agree to the registration of a bond over the property to secure the payment of the purchase price.

But what the parties don’t keep in mind is that this agreement between the parties constitutes a credit transaction as defined in the National Credit Act (hereinafter called the Act) and that in certain circumstances the seller will have to register as a credit provider in terms of the Act.

To establish if the Act will be applicable and if the seller should register as a credit provider one should carefully consider the following:

  1. The Act will apply to all written credit agreements between parties dealing at arm’s length. This is to probably curb underhand dealings between family members at the peril of other third parties.
  2. Arm’s length transactions are not defined in the Act but they exclude, for example, transactions between family members who are dependent or co-dependent on each other and any arrangement where each party is not independent of the other and does not strive to obtain the utmost possible advantage out of the transaction.
  3. The Act does not apply where:

    • The consumer is a juristic person whose annual turnover or asset value is more than a R1m;
    • The purchaser is the State or an organ of the State;
    • A large agreement (i.e. more than R250 000, such as a mortgage) is entered into with a juristic person whose asset value or turnover is less than R1m.

A credit agreement includes a credit facility, credit transaction and credit guarantee or a combination of these.  The relevance is the following:

  1. A credit facility requires fees or interest to be paid;
  2. A credit transaction does not necessarily require interest or fees to be paid. An instalment agreement would suffice to qualify as a credit transaction.

An instalment agreement is defined and relates only to the sale of movable property.

A credit transaction also includes any other agreement where payment of an amount owed is deferred and interest or fees are charged.

A mortgage agreement qualifies as a credit transaction [Section 8(4)(d)] and the importance is that mortgage  is defined in the Act as a pledge of immovable property that serves as security for a mortgage agreement.

Mortgage agreement is also defined as a credit agreement secured by a pledge of immovable property.

Section 40 of the Act requires one to register as a credit provider should you have at least 100 credit agreements as credit provider OR if the total principal debt under all credit agreements exceeds R500 000. Principal debt means the amount deferred and does not include interest or other fees.

It follows that if you sell your home to an individual in a private sale (i.e. where he does not get a bond from the bank) and you register a bond as security, you have to register as a credit provider UNLESS the principal debt is less than R500 000 or the buyer is a juristic person and the price is more than R250 000.

The implications for the seller could be far-reaching if he is not registered, as the agreement will be unlawful and void, and a court must order that:

1. The credit agreement is void as from the date the agreement was entered into;

2. The credit provider must refund to the purchaser any money paid by the purchaser under the credit agreement, together with interest;

3. All the purported rights of the credit provider under the credit agreement to recover any money paid or goods delivered to, or on behalf of the purchaser in terms of the agreement, are either cancelled or forfeited to the State.

The application form to register as a credit provider and also the calculation of the registration fee that is payable to the National Credit Regulator (NCR) can be found on the NCR’s website. If the seller has not registered by the time he enters into the loan agreement he may still register within 30 days after entering into the loan agreement.

Sellers, be careful when you enter into these types of agreements as non-compliance with the Act could be a costly exercise.

This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.