Under the Consumer Protection Act, the Voetstoots clause does not apply to a real estate transaction in which the seller sells the property in due form. This generally applies to developers, contractors and investors. Indeed, the seller of real estate is responsible for a latent defect, regardless of the Voetstoots clause, if the seller was aware of the defect of the land for sale and he had not informed the potential buyer of these defects. This omission is almost akin to fraud. In summary, when a seller wishes to sell real estate privately, including the Voetstoots clause, he is required to disclose all defects of the property he knows. A seller can further weaken potential liability by adding a conditional report to the sales contract. The status report would essentially be the seller, who outlines the quality of the property and lists all the defects. For example, Person X sells a mobile phone to Person Y. Person X states in the sales contract that the Voetstoots mobile phone is sold (or „as it is“). The Y person, once he has purchased the cell phone, cannot return the cell phone and ask for a refund if it turns out that the phone was defective because of the Voetstoots clause that allowed the person to accommodate the tacit guarantee that the phone was free of defects. It is important that not all buyers benefit from CPA protection. For the purposes of paragraph 5, paragraph 2, the law does not apply to a transaction if a consumer/buyer is a legal entity with an asset or annual turnover greater than R2,000,000 (two million rand).

A sale agreement between a seller and a buyer with an annual turnover of more than R2,000,000 (two million rand) may include a voetstoots clause, since this transaction has no protection under the CPA. Since the introduction of the Consumer Protection Act (CPA) in 2011, many buyers and sellers of real estate have wrongly assumed that the Voetstoots clause is no longer applicable. If a seller hides a defect or reveals no known defects, he cannot hide behind the voetstoots clause. A defect is an error that, in its normal use, creates an unacceptable risk of damage. The difference between a latent defect and a lack of patents is – a latent defect is a lack of materials that is not visible after proper examination of the property, and a lack of patents is a defect that can be easily detected by anyone who does a fairly thorough examination. According to the Common Law, a seller is liable to the buyer for all latent defects of the land sold for a period of 3 (three) years after the defects are discovered. If a Voetstoots clause is included in a sales contract, the seller cannot be held liable if the buyer discovers latent defects in the property, unless the buyer can prove that the seller was aware of the latent defect and did not disclose it to the buyer.

  Posted in: Allgemein