As a home purchaser, the onus is on you to ensure that you have conducted a thorough investigation of the property prior to the purchase. However, a thorough investigation may still not yield any indicators to the purchaser of the defects/faults of the property. There are two types of defects that are referred to - a latent defect or a patent defect. In order to determine whether it is the latter or former, consideration must be given to whether the defect itself would have been readily revealed during the viewing of the property. Latent defects are not readily revealed through a reasonable inspection of the property, whilst a patent defect is not hidden and thus can easily be revealed should the purchaser do a reasonable inspection.

Under common law, the purchaser has recourse should they find a latent defect of the property subject to the circumstances of the case meeting certain criteria. The most important aspect is to prove that there was misrepresentation by the seller and that they were in fact, aware of the defect and knowingly failed to disclose this. Should the purchaser fail to prove that the seller was aware of the defect, the seller cannot be held liable.

Voetstoots Clause

The term included in the majority of sale agreements is the voetstoots clause, essentially referring to the fact that the asset (or property in this case) is sold as-is. Thus, a purchaser cannot simply return the property and request repayment if they later discover a defect. However, this does not mean that a seller will get away with it if it can be proven that there was a fraudulent misrepresentation, as referred to in the above paragraph. The purchaser shall have recourse available, regardless of the inclusion of the voetstoots clause, in the following circumstances:

• There was a material and fraudulent misrepresentation; 
• The defect had been deliberately hidden during the inspection and had the purchaser been aware of the defects, the purchaser likely would have not gone through with the purchaser or would have negotiated for a lower purchase price; and 
• The seller was aware of the defect and failed to disclose it to the purchaser.

Remedies available

Should a case be made for the fraudulent misrepresentation of a latent defect, the purchaser shall be entitled to the following remedies:

• A claim for monetary damages, particularly in the event that repairs needed to be made; or 
• A claim for a price reduction of the purchase price; or 
• In the case of serious defects, to cancel the sale agreement and claim for the repayment of the purchase price inclusive of interest that would have accrued thereto.

Conclusion

In conclusion, it is important when considering the purchase of a property that you conduct a thorough investigation thereof. You may also have experts assist you in this inspection in order to ensure that all is in order. This may mitigate any surprises at a later stage and will assist you in making an informed decision on your purchase. Any defects identified should be noted in your offer-to-purchase or sale agreement. However, should you find yourself in a predicament post-purchase, it is recommended that an expert is brought in to assess the defects and furnish you with their report, which will no doubt assist you should you wish to take the matter further. Sellers have the duty to disclose all defects of the property that they are aware of, and should be held liable for their failure or refusal to do so. 

Submitted by Schoeman Law