VOETSTOOTS CLAUSE IN A SALE AGREEMENT
What is a voetstoots clause?
A voetstoots clause is a standard clause, usually found in agreements of sale, in respect of the purchase of property. It is a clause which states that the purchaser is purchasing the property in the condition in which it is found or viewed, in other words with defects and all.
Many disputes have arisen due to the fact that sellers and purchasers do not necessarily understand what the voetstoots clause actually means. Understanding how it affects you, as a potential seller or purchaser, can go a long way to making sure that your transaction runs smoothly.
Example of a voetstoots clause
“The property is sold subject to all conditions and servitudes mentioned or referred to in the Title Deed relating thereto, and to all other terms and conditions which may exist in regard thereto, and in the condition and to the extent such as it now lies voetstoots and absolutely as it stands. The Purchaser/s acknowledge/s that he/her/they is/are fully acquainted with the property, its nature, condition and locality, and with the conditions recorded in the Title Deed in respect of the property. If the property is erroneously described in the Title Deed, such error shall not be binding on the Seller/s.”
What does “voetstoots” mean and why is a voetstoots clause included in a sale agreement?
The term “voetstoots” originates from Dutch and is a common law principle found in South African law. The literal meaning of “voetstoots” is the action of purchasing something “with a shove of the foot” or “as it is”. A voetstoots clause is important to note when purchasing a property as there is an inference that the property is sold free from any defects – this simply means that what you see is what you get. In other words, the purchaser agrees to purchase the property as it appears at the time of sale and that there can be no claims against the seller for any defects discovered at a later stage.
A typical sale agreement will contain a voetstoots clause which frees the seller from liability for patent or latent defects which the purchaser may later find upon taking ownership and possession of the property. Whilst this clause will protect the seller, the protection is limited. There are exceptions that permit the purchaser to cancel the sale agreement or sue the seller for a reduction in the purchase price. These exceptions include:
- The property had a defect at the time of sale;
- The seller was aware of a defect and deliberately concealed it as he/she was aware that if it was not concealed and the purchaser saw it, the purchaser would either not have continued with the transaction, or the purchaser would have negotiated a more favourable purchase price;
- The seller was aware of the defect and failed to disclose the defect to the purchaser; and
- The seller made fraudulent or innocent material misrepresentation.
What constitutes a patent and latent defect?
A “patent defect” is one which is obvious and easily seen such as a large and noticeable crack in the wall.
A “latent defect” is one which is not easily noticed and hidden from view such as faulty pool pumps and geysers, rusted internal pipes, leaking roofs as well as defects concealed such as dampness behind a cabinet.
The term “latent defect” was defined in the Odendaal case where the Supreme Court of Appeal held that where an illegally erected structure was such that it may require either its demolition or alteration, as a condition for municipal approval of the plans, such facts constitute defects that interfere with the ordinary use of the property, thus constituting a latent defect as understood in the context of voetstoots. Consequently, a voetstoots clause also provides for the absence of statutory authorisations, and the particular structure in this case was not authorised. The absence of statutory permission, necessary to render the building authorised, was thus a latent defect to which the voetstoots clause applied. If a purchaser wanted to avoid the consequences of a voetstoots sale, the onus was on him or her to also show that –
- the seller was aware of the latent defect and failed to disclose it; and
- that the seller deliberately concealed it with the intention to defraud.
There was no evidence led that the appellant was aware that the garage had contravened building regulations, and no fraudulent non-disclosure was proved. The court thus concluded that the appellant was protected by the voetstoots clause, and could not be held liable for the defect.
The effect of the Consumer Protection Act in respect of voetstoots clauses
The Consumer Protection Act 68 of 2008, (“CPA”) came into effect on 1 April 2011. The effect of the CPA on the sale of properties has been far reaching, and specifically includes the right of a purchaser (who is also deemed to be a consumer under the CPA) to be informed of all the details regarding the property being purchased. Sellers will no longer be able to hide behind the voetstoots clause to save themselves from later claims by purchasers, if they were aware of defects in the property.
The CPA addresses this issue by an ‘implied warranty of quality’ in respect of each transaction that falls within its ambit. Section 55 of the Act stipulates that a buyer has a right to receive goods that are appropriate to the purpose for which they are bought, and that they should be of good quality, in working order and without defect.
This means that it does not matter whether the buyer could see the defect or not, nor whether the seller fraudulently masked the defect. Defects must be expressly disclosed and a general clause that the purchaser accepts the property “as is” will not be acceptable (as long as the sale is subject to the Act).
The only way sellers can get past the implied warranty of quality is to describe the condition of the property in specific detail, to make it clear in which condition the property is being sold. The purchaser then has to ‘expressly agree’ to accept the property in its current condition. Only if the purchaser knowingly acted in a manner consistent with accepting the property in a less than ideal condition, would the implied warranty of quality fall away. Every defect must be described in the sale agreement that the purchaser signs. This means that sellers will need to amplify their sale agreements in order to make provision for any and all defects that could possibly be present in the property being sold.
A voetstoots clause included in an offer to purchase will not free the seller from any liability under the contract. The seller has a duty to disclose any latent defects to the purchaser. Where the seller has failed to disclose any defect he/she may be required to refund a portion of the purchase price or even accept cancellation of the entire sale, depending on the nature and/or extent of the defect concealed.
The effect of the CPA has been that the Voetstoots clause will have little power to save a dishonest seller. Notwithstanding the aforementioned, it is still in the purchaser’s best interests to have a property thoroughly inspected prior to signing a sale agreement. An inspection of the property should include the structure, any outbuildings as well as the foundation. All problems, whether they seem minor or major, are required to be recorded in the sale agreement.
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