Gauteng Business News

Send  Share  RSS  Twitter  26 Jul 2010

PROPERTY: RealNet Call to Replace ‘Voetstoots’ with Home Inspection


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Looking past the current debate on the “voetstoots” clause in property sale agreements and whether it will still be allowed when the new Consumer Protection Act (CPA) comes into effect later this year, RealNet says there is a simple answer, and that is independent home inspection.

Jan Davel, COO and director of the estate agency group, notes that in the US and UK, a property being sold must pass a home inspection or “appraisal” by an independent, accredited expert in order for the prospective buyer to obtain a home loan.

“And although this system was originally introduced to give the lenders peace of mind, a satisfactory appraisal is also of great benefit to the homebuyer - and to the seller, who then doesn’t have to worry about post-sale comebacks from buyers unhappy with their choice.”

He suggests that a similar system should be introduced in SA, where most residential property sale agreements still contain a standard “voetstoots” clause that basically means that the property is being sold “as is” and without any guarantees.

“This clause is seen as being all in favour of sellers, as it protects them from liability for latent or hidden defects, but things are seldom so clear-cut. Buyers can still sue for damages if they believe there was deliberate non-disclosure of latent defects by sellers, and they can and do try other ways to get deals cancelled if they feel cheated, like refusing to pay deposits or occupational interest, and dragging out the transfer by taking weeks to sign the necessary documents.”

On the other hand, says Davel, it must be acknowledged that the “voetstoots” clause has sometimes been abused by unscrupulous sellers and / or their agents, and that there is a case to be made for protecting buyers against this possibility, using the Consumer Protection Act.

“The trouble is that it seems at this stage as though the new legislation will only apply to ‘primary suppliers’ such as developers, speculators and institutions with large property portfolios, whose business is trading in property, and not to individuals selling their own homes in one-off transactions, who will thus still be able to put a ‘voetstoots’ clause in their sale agreements.

“And to make matters worse, it is not at all clear whether estate agents, whose normal course of business is to be involved in property transactions, will be regarded as having the same liability as primary suppliers, or whether they will be seen as third party facilitators of the one-off transactions where voetstoots could still apply.”

However, he says, the CPA does make clear provision for the new National Consumer Commission to accredit consumer protection organisations. “And we think that in this context it should look at licensing professional home inspection organisations to provide comprehensive and unbiased reports that would create total transparency between homebuyers and sellers, and eliminate the ‘voetstoots’ controversy altogether.”

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