Latent and patent defects and the voetstoots clause

What is the effect of a voetstoots clause in a Sale Contract on the discovery of undisclosed defects by the buyer on taking occupation of a property?

When you buy something, there is an implied warrantee that the thing sold is free from any defects. A seller can contract out of that implied warrantee by stating that the thing sold is bought ‘as is’. Most agreements of sale of immovable property contain a voetstoots clause freeing the Seller from any liability for patent and/or latent defects, which the Buyer may later find when taking occupation of the property.

 The Meaning of "Voetstoots"

 The above article states that the word voetstoots is an Afrikaans term generally used to effectively describe, in just one word, the action of buying something as is, that is just as it stands in whatever condition it is, warts and all. It is essential to all sales of property purchased second hand which may well have deteriorated through normal wear and tear or which may be defective to some extent as a result of its constant use or through natural decay over a period of time. Its basic purpose is to shield the Seller from any action by the Buyer, on discovering any defects he was not aware of when purchasing the property, from doing anything to jeopardize the actual sale contract.

This is a typical voetstoots clause contained in a sale of immovable property:

The property is sold voetstoots and the Seller shall not be liable for any defects, patent, latent or otherwise in the property nor for any damage occasioned to or suffered by the Purchaser by reason of such defect. The Purchaser admits having inspected the property to his satisfaction and that no guarantees or warranties of any nature were made by the Seller or his agent regarding the condition or quality of the property or any of the improvements thereon or accessories thereof.

This illustrates a clause for the sale of a movable asset:

The (describe article sold) is sold voetstoots. The Seller shall not be responsible for any defects latent or patent or any damage resulting therefrom and the Purchaser hereby agrees to accept the (goods) as they stand with all faults.

These types of voetstoots clauses normally free the Seller from his implied warranty against all patent and latent defects. However, there are two exceptions that would entitle the purchaser either to cancel the contract or sue for a reduction in the selling price:

 The seller knew of the defects and did not disclose them to the purchaser;

 The purchaser can also cancel the contract on the basis of a fraudulent or innocent material misrepresentation, even if the sale is voetstoots (but only if the latent defect is so serious that if the purchaser had known of it he would not have bought).

Our case law provides that '...a seller who was aware of a defect will not be excused by the fact that at the time of sale he declared that he was selling the thing such as it is, and that he did not wish to be held liable for its defects ...and ‘…that the operation of the voetstoots clause was thus confined to cover those latent defects which the seller did not deliberately conceal in order to induce the contract... '

Before looking at how far this protection goes it is important to explain the distinction between these two different types of defects.

Patent defect: a defect that is, or should reasonably be, easily identifiable upon inspection of the goods or property.

Patent defects are defects which the normal person should be able to see upon an inspection of the thing sold. If the purchaser has not inspected the thing sold prior to the contract he is entitled upon receipt of the thing to examine and test the goods before legally accepting delivery. The above article describes patent defects as flaws that will be clearly visible on a normal inspection of a property. They include wall cracks, sagging gutters, broken windows, missing tiles and the like. It is a Buyer’s duty to acquaint himself with the general condition of a property on purchasing it and he cannot later claim he did not see such defects. The test is an objective one, namely what could have been seen on the original inspection of the property.

Latent defect: a defect in an article sold that is not apparent after ordinary inspection by a 'reasonable man'.

Latent defects are defects which only an expert could discover or defects which cannot be discovered by an ordinary person during a reasonably thorough inspection, for example,rising damp in a house or a motor car having been in a major car accident. The article gives more examples of latent defects: faults that are not immediately obvious and are hidden from view. These include faulty pool pumps and geysers, rusted internal pipes, leaking roofs (except where strain marks make the leak obvious) and defects that have been concealed such as dampness behind a cabinet. The test is what could not normally be seen on inspection

Where there is some defect in the house which is not apparent on a careful inspection, the seller is liable for those defects if he or she knew about them. The voetstoots clause in the agreement of sale will not take away the seller's liability. In other words, the seller has a duty to reveal to the buyer any latent defects. In such an instance, the seller may be called upon to refund part of the purchase price or even to accept cancellation of the entire sale, depending on the nature or extent of the defect.




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Tuesday, 31 January 2017 Posted in Property Law and Conveyancing

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