Why purchasers should not shy away from the costs of hiring an expert to inspect the property to be acquired

In the recent case of Banda v van der Spuy 2011 JDR 1272 (GSJ), the court was presented with an all too familiar set of facts pertaining to the acquisition of a residential property. The property had a thatch roof which had previously suffered a leak and at the time of concluding the sale agreement, the purchasers failed to conduct an inspection by an expert after noticing certain repair works and instead relied on a statement made by the sellers that they would ensure that the guarantee for the contract work done to the thatch roof in respect of the previous leak would be passed over to them. The sale agreement contained a voetstoots clause which protected the sellers from any claims for latent defects (save for instances where the sellers new of those defects) and after the transfer of the property when the next rain came, the leak resurfaced and the purchasers discovered to their horror that there were in fact structural problems with the thatch roof which required significant costs to remedy. In addition, they had never called for the guarantee and drink show have we given a one-liner from the previous contractor in terms of which the guarantee had already expired and excluded wind and rain damage.

The purchasers then tried to hold the sellers liable on the basis of their alleged knowledge of the defects, alternatively on the basis of their fraudulent/negligent misrepresentation that a guarantee with regard to the structural soundness of the thatch roof was in place and that the defects had been rectified, which allegedly induce them to enter into the contract.

The purchasers failed on both claims as they could not prove on a balance of probabilities that the sellers had knowledge of the defects at the time of concluding the sale agreement (here they relied on the previous contractor, proved to be an unreliable witness) nor that they suffered the damages claimed as a direct result of the fraudulent misrepresentation (the judge did find that fraudulent misrepresentation occurred) inasmuch as they had never called for the guarantee prior to transfer which guarantee did not cover structural work pertaining to the roof. The difficulties in succeeding with such a claim for summarised by the judge as follows:

it is a trite legal principle that absent proof of designed or active concealment of the defects, the voetstoots clause would exclude liability for any latent defects such as those that exist in the present case (see Van der Merwe v Meads, supra, and cases there cited, especially Knight v Trollip, Forsdick v Young and Glastenhouse (Pty) Limited v Inag). I have already found that the defendants as a probability were not aware that the thatch roof suffered from a fundamental structural defect relating to the pitch of the roof and therefore could not have known or foreseen that an inspection of the roof by an expert might lead to the disclosure of the latent defects. The defendants could not have made the misrepresentations relating to the guarantee with the intention of designedly or craftily concealing or preventing the plaintiffs from discovering the existence of the latent defects. The defendants are thus entitled to rely upon the voetstoots clause in order to resist the plaintiffs’ claims”.

 

We therefore urge clients to consider the relatively minor costs of obtaining expert advice when negotiating a sale agreement and to seek the advice of an attorney when formulating the relevant clauses in the sale agreement providing for an inspection by an expert to verify certain facts regard to the property.

 

Disclaimer: Although Hildebrand Attorneys is committed to furnishing reliable and accurate information, this article is intended as a general reference guide only and does not constitute legal advice. Hildebrand Attorneys cannot take any responsibility for the accuracy or currency of the information and if you require particular information you are advised to consult with the article’s author or a qualified legal authority. This article may not be reproduced without the express written permission of the author and Hildebrand Attorneys accept no responsibility for any loss or damage that may be occasioned as a result of the reliance by any person on the information contained herein

 

 

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