The topic of latent and patent defects requires further discussion since our panel is often asked to comment on situations relating to this issue.
This week’s question comes from a reader who purchased a property in 2003 for the sum of R160 000. Two years ago, cracks started appearing in the walls of the garage.
Upon investigation, the insurance assessor found that the cracks were due to structural failure and that these had been repaired and painted over “before the sale took place”. The insurer therefore rejected the home-owner’s claim.
In order to repair the underlying problem, the structure has to be demolished at a cost of approximately R147 000. The reader is concerned that the time elapsed since the purchase of the property will affect his hope of redress.
“Where there is some latent defect in the property, the seller is liable for that defect if he or she knew about it and failed to disclose it to the purchaser, even if the sale agreement contained a voetstoots clause,” says Charlotte Vermaak from Chas Everitt in Port Elizabeth.
Vermaak explains that a latent defect is not apparent upon an ordinary inspection by a reasonable buyer and includes faults that are not immediately obvious or hidden from view.
“The issue then becomes one of proof: was the seller aware of the problem and, furthermore, did he or she try and hide it by, for example, plastering and painting over cracks?”
Determining the seller’s frame of mind, and thus intention, at the time of the sale can be tricky, says Vermaak.
“Factors to be considered include any pertinent questions asked by the purchaser in trying to establish potential problems prior to purchase.”
Vermaak says the buyer has various remedies – such as instituting a claim for a reduction in the purchase price to a figure he would have paid had he known about the defect.
“Alternatively, if the purchaser can show that he would not have purchased the property had he known about the defects, the transaction could be cancelled and damages claimed. This would obviously be more complex in a case like this, where transfer has already taken place.”
A further option would be for the purchaser to hold the seller to specific performance – have him repair the damage to the property at his own expense, says Charl Crous from Du Toit Strömbeck Attorneys in PE.
“With so much time having passed between the date of purchase and time of claim, depending on the selected remedy, the damages would have to be carefully considered.”
Crous says, depending on the nature of the transaction and parties involved, the Consumer Protection Act – specifically the provisions relating to a warranty given by a seller to a purchaser – may be applicable.
Applying the act to a property transaction affects aspects like the inclusion of a voetstoots clause in a sale agreement and the declaration of defects by a seller, says Crous.
“The provisions of the act will, for the most part, only apply to contracts entered into from April 1 this year.”
Crous says that even though once-off transactions between private individuals would normally fall outside the scope of the act, certain components, such as the involvement of an estate agent, would be regulated by it.
The reader is clearly concerned about prescription, that is, whether or not the claim has lapsed, says Crous.
“Prescription begins when the purchaser becomes aware of the defect. By and large, the period is three years, therefore our reader’s claim should still be valid considering the discovery of the defect in 2009.”
Alan Straton
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