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BUSINESS NEWS - Purchasing a residential property is often the most significant financial investment a person will make.
Yet even after taking occupation, a buyer may discover defects that were not apparent during inspection.
Common latent defects include a leaking roof, unstable foundations, faulty wiring, plumbing that fails under pressure, hidden termite or pest damage, and non-compliant or unsafe structural work.
Statutory defects, such as non-permitted building additions, lack of compliance with municipal building regulations, or failure to obtain occupation certificates, also fall within this category, as these may only become apparent during a municipal/expert inspection.
These defects are not visible or discoverable upon reasonable inspection at the time of sale, and they can have serious financial and safety implications.
While the voetstoots (“as is”) clause generally protects sellers against liability for such defects, this protection is not absolute.
If a seller knew of a defect and deliberately remained silent, or actively misrepresented the property’s condition, courts have held that the voetstoots clause offers no defence.
Voetstoots and Its Boundaries
The voetstoots clause means that the purchaser accepts the property with all its defects, both patent (visible to the naked eye) and latent (hidden and not easily discoverable). Purchasers are always responsible for patent defects unless the contract provides otherwise.
However, the protection afforded to sellers is not unlimited. In Speight v Glass and Another 1961 (1) SA 778 (D) at 782A, Fannin J held that:
“A seller who knows of the existence of defects in the thing sold, but deliberately refrains from disclosing them to the buyer, is guilty of fraud.”
It was further held in Van der Merwe v Meades 1991 (2) SA 1 (A) that a seller loses the protection of the voetstoots clause if:
1. They were aware of the defect at the time of sale; and
2. They intentionally concealed it with the aim of misleading or defrauding the purchaser.
This is a high threshold, as the purchaser must show both knowledge and intent. Historically, many sellers avoided liability by denying fraudulent intent.
Silence as Fraud:
In Odendaal v Ferraris 2009 (4) SA 313 (SCA), the court held:
“Where a seller recklessly tells a half-truth or knows the facts but does not reveal them because he or she has not bothered to consider their significance, this may also amount to fraud.”
Thus, where a seller knows of defects and deliberately remains silent, that silence may be fraudulent. Liability arises not only where a seller actively misrepresents facts, but also where they “craftily refrain” from informing the purchaser of defects, knowing the purchaser is ignorant of them.
The principle is simple: a seller who remains silent about a defect they know of, in circumstances where a reasonable person would speak up, is acting dishonestly.
Under such circumstances, the voetstoots clause provides no shield.
Aedilitian Remedies: Protection for Purchasers
Where latent defects exist, the purchaser is not without recourse. Depending on the circumstances, the following aedilitian(common law) remedies may be available:
- Actio Empti (Damages)
Purchasers may claim damages if the seller breached a warranty, acted fraudulently, or knowingly concealed defects. - Actio Redhibitoria (Repayment and Cancellation)
Where defects are so serious that the property is unfit for its purpose, the purchaser may rescind the contract and claim repayment of the purchase price plus interest. - Actio Quanti Minoris (Price Reduction)
If cancellation is not justified, the purchaser may claim a reduction in the purchase price. This requires expert valuation to show the difference between the actual value of the property and the price paid.
Conclusion
The voetstoots clause does not provide blanket immunity to sellers. South African courts have made it clear that where a seller knows of latent defects and either misrepresents the condition of the property or deliberately remains silent, they act fraudulently. In such cases, purchasers may claim damages, a price reduction, or even cancellation of the contract.
The law thus balances fairness: while buyers must beware and conduct inspections, sellers cannot hide behind dishonesty or silence. Fraud unravels all.
Article by Ruben Maritz, Associate (LLB)
Kindly contact Ruben, ruben@rgprok.com, or 044 601 9900, should you require any further information.
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