Introduction
Property sales in South Africa are typically covered by the so-called “voetstoots” clause, which essentially means buying a property “as is”. But this applies only to “patent” defects and to “latent” defects that the property owner is unaware of. Failing to disclose a “latent” defect you are aware of is not covered by the “voetstoots” clause and amounts to fraud.
In June 2023, a landmark judgement was issued in June 2023, Le Roux v Zietsman and Another (330/2022) [2023] ZASCA 102 (15 June 2023), unsuspecting buyers of properties containing defects finally received long-awaited vindication. This case has highlighted the danger for property sellers who deliberately fail to tell buyers about hidden defects they are aware of. In other words, if you are selling your property, you need to disclose to prospective buyers any hidden defects in your property that you know about because a buyer needs to factor the cost of repairing such a defect into the offer to purchase.
The court confirmed that a fraudulent non-disclosure regarding latent defects might lead to a successful claim for damages. The action relieves a purchaser who discovers the latent defect(s) known to the seller, which they fraudulently failed to disclose before the sale of the property to induce the purchaser to conclude the sale.
Defects
A patent defect is a property fault that should be obvious to a reasonable person on inspection. Examples are wall cracks, shattered windows and missing tiles.
A latent defect is a fault not noticeable to the untrained eye on casual inspection. Examples are rising damp, faulty pool pumps or geysers and leaking roofs.
Facts of the case
In July 2011, Mr Christiaan Frederik Zietsman and Mrs Ester Petronella Zietsman (“Respondents”) bought a guesthouse situated in Tzaneen, Limpopo, from the “Appellant”, Mr Jan Pieter Le Roux. Mr Zietsman paid R1 300 000 for the guesthouse to make his wife’s dream of running a guesthouse a reality. The property was transferred into their names on 30 September 2011, and they took occupation on 11 July 2011. Barely three months after they had taken occupation of the property, it rained heavily. There was extensive leaking of the entire roof. As their funds were exhausted from purchasing the guesthouse, the respondents were compelled to seek an extra R241 281.76 to repair the roof. To add to their woes, they could not conduct any business for the two months the guesthouse was under repair. As a result, they lost the income which would have been generated during that period.
Consequently, the Respondents sued the Appellant and succeeded. The voetstoots clause in the deed of sale (which the Appellant initially relied upon but subsequently abandoned) was inapplicable.
Various factors were considered in establishing the causal connection between the defects and the damages suffered. In summary, there were defects to the roof, which were repaired but not disclosed. The Appellant had a duty to disclose the latent defects in the entire roof.
In his version, the Appellant had no genuine belief at signing the deed of sale that the leaking roof had been fixed. As demonstrated by the expert witness putting only a plastic sheeting/membrane in the ceiling was a temporary measure which could not withstand rains, more so heavy rains. This was not disclosed to the respondents. It is simply disingenuous for the Appellant, who had been in occupation for five years, to say that he was unaware of the defects.
The appeal was dismissed.
Conclusion
The seller had failed to disclose the full extent of the leakage and defects in the roof by reassuring the purchasers that the leaks had been repaired to secure a sale and benefit himself. The seller had a duty to disclose the latent defects in the entire roof and would have been aware that structural defects were causing the leaks. The non-disclosure played a crucial role in the purchasers’ decision to acquire the property. To succeed with a claim based on fraudulent misrepresentation, a purchaser must show that :
(a) a seller (at the time of the sale) was aware of the defect;
(b) the seller deliberately failed to disclose the defect to the purchaser, and
(c) to induce the purchaser to conclude the sale. Defects are latent in that they would not have been visible or discoverable upon inspection by the ordinary purchaser.
Contact an attorney at SchoemanLaw for assistance with your property sales and related issues.
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