Friday, 3 February 2012


This extract from their newsletter is published with the kind permission of Messrs. Maurice Philips, Weisenberg, @ Long Street, Cape Town and their publishers of this newsletter.

You buy your dream house, you settle in, all's well. Until it rains, and the roof starts leaking. Who's liable?
The law, and the limits to voetstoots
First, determine whether the leak problem is a latent defect, i.e. one that "would not have been visible or discoverable upon inspection by the ordinary purchaser".
Next, check the precise terms of the sale agreement. Standard practice is for property sellers to sell the property "as is", by contracting out of liability for latent defects with a voetstoots clause.
Note that a seller can never use a voetstoots clause to escape liability for any defect which he/she is actually aware of - deliberate failure to disclose a material defect is fraudulent.
Moreover, where the CPA (Consumer Protection Act) applies - and although current thought is that one-off private sales won't fall under the Act, you should take specific advice on this in need - the buyer's position is likely to be a lot stronger, perhaps even to the extent of voetstoots clauses losing all validity. There is also speculation as to the extent that estate agents risk liability in sales generally. (Note that the court case mentioned below arose before the CPA came into effect.)

Knowledge is key!
As an interesting case recently before the High Court neatly illustrates, the seller cannot be held liable for a latent defect of which he was unaware. The house in question had a thatched roof, and the seller had recently effected repairs to it to rectify several problems which had caused leaking previously - all of which he had disclosed to the buyer.

What's the perfect pitch for thatch?
After transfer, the roof again leaked, and a structural engineer specialising in thatched roofs told the buyer that the roof should be replaced rather than repaired, because its pitch was largely incorrect (his opinion as expressed in Court thereafter being that a pitch of 45° is to be recommended, whilst "a pitch below 30ยบ cannot be regarded as functional").

The finding
The buyer sued the seller for a reduction in the purchase price, alternatively damages. Finding that the seller had not known of the relevant structural defect, i.e. the incorrect pitch of the roof, the Court upheld the seller's reliance on the voetstoots clause in the deed of sale, and dismissed the buyer's claim.

Sunday, 8 January 2012


This contribution is published with the kind permission LawDotNews (see bottom) and the compliments of Messrs. Maurice Phillips, Wisenberg, 2 Long Street, Cape Town 8000.
When you buy a property you will commonly have to pay a deposit of part of the purchase price, the balance to be paid on transfer.
Make sure that the "deposit clause" is properly drawn to protect your interests. A recent Supreme Court of Appeal decision highlights the dangers of not doing so. 

The facts
A farming trust put its business, incorporating 3 farms, up for auction 
The successful buyer paid a 20% deposit of R900,000 to the auctioneer
The auctioneer paid out the deposit to the trust's creditors on confirmation of the sale
The buyer became aware of a land claim against the farms, cancelled the sale and sued for return of his deposit
Judgment was granted in favour of the buyer for return of his deposit, but the trust was sequestrated and he was left with a concurrent claim against the trust
This left the buyer with a substantial loss (over R700,000) and he sued the auctioneers and their representative in an attempt to recover it.
The buyer takes a big hit
The buyer lost, the Court holding that the auctioneer had acted correctly in paying out the deposit.
Critically, the conditions of the auction sale as drawn did not specify that the deposit had to be held in trust pending transfer, and the Court's interpretation of the contract as a whole was that it obliged the auctioneer to pay the deposit out to the seller before transfer.

So, how do you protect your deposit?
Don't sign anything until your attorney has checked it.
Insist that the sale agreement provides for the deposit to be paid into a trust account (the transferring attorney's trust account is normally specified, but you and the seller can agree otherwise), pending transfer.
Note that the monies held in trust should generally be invested, with interest, with interest accruing for your benefit.

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Tuesday, 25 October 2011

Retirement and property: What are our options?

Sooner or later one reaches this crucial stage and the number of options can be quite confusing. This can  lead to anxiety and sleepless nights.
Most seniors will agree that the subject often comes up in conversations with children and fellow seniors. The easy way out is to rest in your comfort zone and do nothing but is that the best option? Certainly not! You must consider all options and you must look beyond your current situation.
Broadly speaking these options are:
- Stay in your home.
- Move in with the kids.
- Buy in a retirement village or -complex.
- Retire to your seaside cottage where you have spent so many happy family holidays.
- Buy a cottage on the coast, on a golf estate, a wine, farm, game farm , etc.
- Move to be near loved ones.
- Move overseas, following your family or on your own.
We will be discussing these options and invite you to add your opinion, advice or personal experience to this crucial debate.