What South Africa’s Consumer Protection Act says (effective from 1 April 2011)

South Africa’s new Consumer Protection Act became effective from 1 April 2011.

Its intention is to stop high pressure selling, in which the buyer finds that he has signed for a home without being made aware of the implications and potential drawbacks.

The Act states that all defects must be divulged to the estate agent and the buyer.

Before the act, The “Voetstoots” or “As-Is” clause offered no protection to buyers who found defects only after property transfer had taken place. The only exception was if the seller or agent had deliberately concealed a known defect from the buyer (patent defect), and it was not reasonable to have expected the buyer to have noticed this defect when the property was viewed.

Estate Agents will be held responsible for ensuring that home buyers are fully informed regarding the condition of the property.

  • The “As Is” or “Voetstoots”clause in an Offer to Purchase will no longer apply
  • Estate Agents will not be protected from the risks of non-disclosure.
  • Estate Agents will need to provide full disclosure up-front to potential home buyers.

This Act does impose new responsibilities on estate agents and they will be accountable for:

  • Any action which on later investigation could be characterised as dishonest, unfair or misleading.
  • Any aspects of the property which could be deemed of low or defective quality and/or of questionable value in terms of the price paid.
  • Any documentation which could be deemed difficult to understand or insufficiently explanatory.
  • Any statements in the advertising and promotion of the property which are exaggerated or misleading.

In terms of the Act, if latent defects become apparent in the home within six months of its being transferred to the new owner resulting in a reduction of the value of the home and the seller will have to remedy or pay compensation.

It’s not realistic that a seller (or buyer or estate agent) will, for example, climb onto his roof or into his roof cavity to look for defects or find issues that could present a problem in the near future if not attended to timeously.

This is why buyers, sellers and estate agents should take advantage of a home inspection so that everyone is aware of the condition of the property.