Buying a new property is very exciting. But that excitement can quickly disappear when it comes to navigating the complex terms of the sale agreement. Even the most astute buyer will often rely on the assistance of the agent to explain the fancy Latin terminology, but sometimes things don’t quite go to plan.
While renovations are seen as an investment in a property, usually with the advantage of increasing the property’s value, all such additions must be done in accordance with approved municipal plans. But this is not something that is top of mind when a buyer concludes a sale agreement. It usually only becomes a problem when the buyer seeks to make further additions to the property and the irregular nature of the additions comes to light.
What is the buyer to do?
Two important decisions by our courts have confirmed that unapproved additions to a property fall into the category of latent defects (those which cannot be seen) and as such, the seller will be protected by the voetstoets clause in the sale agreement. In Odendaal v Ferraris[1] the Supreme Court held that “a voetstoots clause ordinarily covers the absence of statutory authorisations and protects the seller against claims based on such latent defects”. This means that the buyer has purchased the property “as is.”
The remedy that exists for the buyer is quite onerous and difficult to prove. In Odendaal the SCA held that “a litigant who undertakes the burden to establish fraud, especially in motion proceedings, must ensure that both his allegations, and the facts on which he relies on underpin them, are clear and specific.” To prove this fraud, the buyer often requires the assistance of an expert. It will also require an enquiry as to the seller’s state of mind at the time of the sale – did the seller know that the plans weren’t approved and, did the seller knowingly conceal this fact at the time of the sale. If the seller did defraud the buyer, then they will not be protected by the voetstoets provisions. This position was confirmed and upheld in the recent case of Haviside vs Hendricks.[2]
The best course of action for a buyer to follow is to dot all the I’s and cross all the T’s before signing on the dotted line: either request all the relevant plans to ensure that the necessary approvals have been obtained by the seller or make the sale of the property conditional on the approved plans being provided by the seller within a specific time period.
It might make the purchase of the property a little less exciting at the time, but doing your due diligence will pay off in the long term.
For any assistance you may need at any time during your property journey, contact Hengst & McMaster Attorneys for expert advice and we can help make the buying or selling of your property a little less daunting.
[1] Odendaal v Ferraris (2009) (4) SA 313 (SCA)
[2] Haviside v Heydricks and Another (2014) (1) SA 235 (KZP)
