VOETSTOOTS – APPLICABLE AS EVER!

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Early in 2017 an article was published by a director of a prominent law firm stating that there is “a legal shift away from the protective blanket of voetstoots for second-hand property sellers with illegal or unapproved structures”.

In the aforementioned article two cases were quoted as proof of this tendency being the case of Banda vs Van Der Spuy and Naidoo vs Moodley.  The writer is of the opinion that these cases as precedence to substantiate her initial quote might be misleading as there were circumstances in these cases that need to be taken into account.

From the effective date of the Consumer Protection Act 68 of 2008 many people were of the opinion that consumer rights will mean the end of the “Voetstoots defense” for a seller.

“Voetstoots”

“The property is sold subject to all conditions and servitudes mentioned or referred to in the Title Deed thereof and to all such other conditions and servitudes which may exist in regard thereto in the condition and the extent such as it now lies. If the property has been erroneously described herein, such error shall not be binding on the seller but shall conform to the description as set out in the Title Deed and the parties agree to the rectification thereof to conform their intention”

“VOETSTOOTS” AND THE LAW

“Voetstoots” originated as a Dutch word with a direct translation “to be pushed with the voet” or with a more indirect translation “to be sold in its current state or as it currently is”. The aforementioned remedy is grossly underestimated and available to a Seller who parts with items or goods arranging from movable to immovable assets.

When immovable property is sold “Voetstoots” it amounts to a sale in terms of which the Seller alleges that he has disclosed all latent and patent defects present at that stage in the property, of which he was aware or should reasonably have been aware. The net effect of this clause is, should a defect present itself relating to the property, which the seller was not aware of or reasonably ought to have been aware, he will be successful in relying on the defense of “Voetstoots”.

Should a Purchaser disagree with a Seller relying on the “Voetstoots” defense, he will have the burden of proof to convince the Court beyond reasonable doubt that the Seller was aware or should reasonably ought to have been aware of the defect and that he maliciously concealed the defect in an attempt to defraud the Purchaser. (Van der Merwe vs. Meades 1991 2 SA 1 (A))

Practical experience shows that the aforementioned burden of proof bestowed upon the Purchaser is enormous and in very few circumstances possible and therefor an incredible powerful remedy available to the Seller.

“Voetstoots” and the Consumer Protection Act 68 of 2008 (CPA)

Since the commencement of the CPA on the 1st of April 2008 many people were of the opinion that consumer rights will mean the end of the “voetstoots” defense for a Seller.

For the CPA to apply to a specific transaction, the relevant parties involved will have to be a supplier and a consumer as defined in the CPA:

“Supplier” – A person who sells or markets good or services in the ordinary course of his business for consideration.

“Consumer” – A person who receives goods or services from a supplier who sells such goods or services in the ordinary course of his business.

Unless the definition in the CPA is amended in future, the Seller of a second hand private dwelling nor the Purchaser of such a dwelling suits the aforementioned definition as it currently stands, as it is not in the Seller’s ordinary course of business to sell his residential dwelling nor is it the Purchaser’s intent to receive the residential dwelling in this context.

The logical conclusion that the consumer remedies applicable under the CPA are not available to the Purchaser of a second hand residential dwelling as the CPA does not apply in this regard. A further conclusion would be that if the CPA being the Statutory Law does not apply, the Common Law of “Voetstoots” will still prevail and therefor “voetstoots” as a remedy is still very much applicable in the Sale and Purchase of Private dwellings.

Should the Seller of immovable property however be a developer who’s ordinary course of business is to build and sell residential dwellings, it will automatically place the Seller and the Purchaser in the definitions as well as the applicability of the CPA and in this instance the Seller will not be able to rely on “voetstoots” as the remedies in terms of the CPA will be available to the Purchaser.

SECTION 55 OF THE CPA IN THE EVENT WHERE THE ACT APPLIES

“Every consumer has a right to receive goods that:

55(a) – Are reasonably suitable for the purposes for which they are generally intended.

55(b) – Are of good quality, in good working order and free of any defects.

55(c) – Will be usable and durable for a reasonable period of time…           

The aforementioned Sections 55(a) to (b) does however not apply if the consumer has been expressly informed that the goods were offered in a specific condition and the consumer has expressly agreed to accept the goods in that condition.

In the light of the aforementioned section of the CPA and some practitioner’s views that the CPA applies in all instances of acquisition of sale of immovable property, the standard defect list attached to most Offers to Purchase by Estate Agents has been introduced which can only be in an attempt to protect the Seller against any possible defects that he has disclosed on such list.

The aforementioned list however cannot serve the aforementioned purpose in the event of sale and acquisition of second hand immovable properties as the Act simply does not apply in these instances but seems to have become practice in any event and definitely does not do any harm. This list however will protect a developer selling a property in a certain condition of which the defects have been disclosed on such a list as the CPA will be applicable in the last mentioned instance.

BANDA VS VAN DER SPUY

Mr. van der Spuy sold a thatched roof property to Mr. Banda and after date of registration Mr. Banda instituted an actio quanti menoris (action for lessening of the purchase price) against Mr. van der Spuy due to serious leaks and structural problems to the thatched roof.

It was determined by way of inspection that the wooden poles of the roof could not support the weight of the thatch roof causing openings to appear between the flashing and the thatch. 

It was further determined that the pitch of the roof was structurally defective in that it was 30 degrees instead of 45 degrees.  Mr. van der Spuy conceded to the fact that he had addressed this problem by way of contractors attending to the leaks but never received a guarantee for the work done.

Irrespective of the aforementioned Mr. van der Spuy did not reveal the aforementioned to Mr. Banda at any stage during the conclusion of the contract and the Court found that Mr. van der Spuy had knowledge of the latent defects and in the light of the fact that the repairs to the roof were never guaranteed, he further had an obligation to reveal this defect or possible re-occurrence of the defect to Mr. Banda and he could not rely on the voetstoots clause.

Short Conclusion

Should a seller know about a defect and attempt to conceal it from the purchaser in a fraudulent manner, or should the seller in the opinion of the Court reasonably ought to have known of such defect, there will be a responsibility upon the seller to disclose the defect during signing of the agreement, by default of which the purchaser will be entitled to keep the seller liable and the seller will not be able to hide behind the voetstoots clause.

The burden of proof however, remains with the purchaser.

NAIDOO VS MOODLEY 2008

In the aforementioned instance the applicant appealed against an Order granted by the Magistrate of Kwadukuza.  The seller sold a property out of a late estate to the purchaser when they wanted to apply for a clearance certificate from the Kwadukuza Municipality, it became apparent that no occupational certificate was issued after construction of the property and therefore a clearance certificate could not be issued.

The Municipality further required certain structural alterations to be made to the property before such occupational certificate could be issued and only after the aforementioned has successfully been concluded a clearance certificate could be obtained.  As the sellers argued that the do not have the necessary finances to effect such structural changes, they have opted to resile from the agreement of sale.

For many reasons of which voetstoots amongst other the Magistrate granted absolution from the instance at the end of the plaintiff/purchaser’s case who seeked to keep the sellers bound to the terms and conditions of the agreement and force them to make the necessary structural changes in order to obtain the occupancy and clearance certificate.

The plaintiffs were not satisfied with this outcome and appealed against the decision to the Kwazulu Natal High Court who made an Order that the appeal be upheld, and the Order of absolution from the instance made by the Magistrate be set aside and that the matter be referred back to Court a quo to determine the remaining issues between the parties.

Short Conclusion

The aforementioned decision respectfully does not abandon voetstoots as a remedy but merely came to the conclusion that the matter should not have been absolved but rather properly heard and adjudicated.

In the case of Van Nieuwkerk vs McCrae the judge expressed himself as follows :

“In my view when a residential property within the area of jurisdiction of a local authority is sold with a building on it the purchaser is entitled to assume that the building has been erected in compliance with all statutory requirements and that it can be used to its full extent.  In my view this assumption is so obvious and self-evident that it is not necessary for it to be specifically set out in an agreement of sale and is implied as a matter of law in any agreement of sale relating to property.”

Although there are a tendency towards financial institutions to demand building plans as a pre-requisite for the approval of mortgage loans, this respectfully does not render the voetstoots clause absolute but rather hampers registration of the transaction due to non-compliance with the financial institutions conditions of loan.  There is however case law in terms of which parties have successfully relied on the voetstoots clause in the absence of approved building plans where they could proof that they did not know or reasonably ought to have known about such absence.

Odendaal vs Ferraris 2009 (4) SA 313 (SCA)

Mrs. Odendaal sold a property to Mr. Ferraris which transfer took place. Mr. Ferraris approached the Local Municipality to obtain copies of the approved building plans only to find that the Out-buildings were not present on the building plans. He confronted Mrs. Odendaal in this regard who raised the defence of “voetstoots” against Mr. Ferraris’ claim.

The Court referred to the Case and test set out in Van der Merwe vs. Meades requiring a Purchaser who intends to counteract the defence of “voetstoots” to prove that the Seller was aware of the defect or should reasonable have been aware thereof and fraudulently concealed the defect.

In the light of the fact that Mrs. Odendaal purchased the property five years before her predecessor in title, under the impression that all statutory requirements and consents including building plans were in order. The Court supported Mrs. Odendaal’s defence and found that she was not aware of the absence of approved building plans for the Out-building was a reasonable expectation present that she should have known and therefor she could successful defence in this instance.

The contrary is also true, that should a party have known about a defect, or reasonably ought to have known, he will not be entitled to rely on the voetstoots defence such as :

Haviside vs. Heydricks 2014 (1) SA 235 (KZP)

Mr. and Mrs. Heydricks purchased a property in Port Shepstone from Mrs. Haviside and wanted to build a flat on top of the existing double garage and out-buildings. Heydricks approached the Local Municipality to obtain building plans.

Upon inspection it was established that the existing double garage was not on any building plan. When the Seller was confronted by this she raised the defence of “voetstoots” and further stated that she did not deem it necessary to obtain permission or to enquire whether her family who constructed the garage in her absence had submitted plans.

The Court found that there was a duty on Mrs. Haviside to enquire whether plan have been approved for the double garage by default of which she had to inform Mr. and Mrs. Heydricks that it was an illegal structure.

In the light of the fact that The Court found that somebody in her position reasonable ought to have known of the requirement of approved building plans to erect such a structure she could not rely on the “voetstoots” clause as a defence.

Conclusion

Until such time as any statutory law abandons the common law remedy of voetstoots it will still remain a powerful remedy to the benefit of the seller and the burden of proof to prove that the seller knew about a defect or reasonably ought to have known will still vest with the purchaser which burden is as we know very difficult but not impossible to comply with.