The ‘voetstoots’ clause – an explainer

The ‘voetstoots’ clause –

an explainer

There are certain terms used in the legal profession which are universally known, among them ‘voetstoots’. But what does this mean? Advocate Bryan Hack, a property- experienced advocate at the Cape Bar explains this term and its implications.

Bryan Hack Adv. Bryan Hack

Selling an item voetstoots means that the purchaser is buying it as it stands, whether or not it has patent or latent defects. Patent defects are obvious on normal observation, whereas latent defects refer to hidden or unseen defects. A voetstoots clause protects sellers in the event of latent defects coming to light after the transaction has been concluded.

Two common misconceptions

This article addresses two misconceptions about the term ‘voetstoots’. One, that the legal principle protects a seller for any possible defects in an item being sold. This is because of the belief that a voetstoots clause in an agreement places all obligation on the buyers to inspect and satisfy themselves about the quality of the item they are buying. The other is that a voetstoots clause has no further legal effect since the enactment of the various pieces of consumer protection legislation by Parliament. As with most legal concepts both these perceptions are wrong. As so often is the case, the response of a lawyer to both these propositions must be “it depends”.

As to the first, that a voetstoots clause removes any liability by the seller of an item for defects, this has never been the law. In simple terms, a seller will be liable for any damages, such as the cost of repair incurred by a buyer if the seller was aware of the defect and failed to disclose it.

The concept of “being aware” is in itself subject to the qualification “it depends”. To be aware in this context is to have no knowledge. A seller can be liable for a defect if they should have been aware of an existing defect that would affect the buyer. This was addressed in a recent judgment handed down in the Western Cape in the case 2016 (1) SA 293 (WCC) .

A case in point

The plaintiffs bought a property and after obtaining possession and ownership the plaintiffs sought an order that the sale be set aside, and the purchase price be refunded as the property was defective. The defects were unusual.

In the evidence it was revealed that the original wooden floors were not level but had been 'levelled' with cement screed and then carpeted and tiled. The uneven floor was the result of the house subsiding on one side. It was a wooden structure built into a slope at the back and with its front on stilts. Of importance was that this was because of a severe decay in the foundation supporting the building. In addition, artificial ceilings were fitted at an angle corresponding to that of the altered floor. Of significance to the purchasers’ case was that they discovered the issues while renovating the property.

The sellers contended that the levelling was done for aesthetic purposes and not to fraudulently conceal the underlying decay of the foundation. They claimed that they had no knowledge of the decay of the foundations and furthermore argued that the house did not suffer from a defect because the state of the foundations did not hinder the ordinary use of the house by the purchaser. The court did not agree with the contentions of the sellers. In considering whether the levelling treatment constituted a defect the court held that a defect, on the “liberal approach” adopted in case law, was any material imperfection in the item sold, preventing or hindering its ordinary or common use; and was latent if not visible or discoverable upon inspection of the item.

What could be regarded as such imperfections changed with lifestyle and custom, and therefore cognisance had to be taken that in modern times renovating a home to suit the lifestyle of the occupants was common practice. The purpose for which an object was bought could influence the question of whether or not it had a defect. A taint in an item gave rise to a claim only if a reasonable man would not expect it in similar items. The purchasers bought the property to live in. They acted reasonably in expecting to be able to renovate the property. The cement screed and false ceilings were features a reasonable man would certainly not expect to find.

The court found that the seller had admitted knowledge of the uneven floor and had failed to inform the plaintiffs of the remedial treatment and this constituted a latent defect.

In addressing the voetstoots clause the court said that it was established law that to avoid the consequences of a voetstoots clause, the purchaser must show, not only that the seller knew of the latent defect and did not disclose it, but also that he or she deliberately concealed it with the intention to defraud. It was also established that recklessly telling half-truths, or knowing the facts but not revealing them because of not bothering to consider their significance, may also amount to fraud by the seller.

The court said that the question was whether the purchasers should have been told about the uneven floors. It was clear that the significance of doing so was never considered and should have been done, and therefore the sellers' actions constituted the necessary intention which therefore defeated the provisions of the voetstoots clause.

The court added that the uneven floors (and ceiling) were a most unusual feature which made renovation of the house exceptionally difficult. The purchasers obviously had an interest in knowing about it, and the sellers should have revealed it.

Advocate Bryan Hack

A seller should err on the side of caution

The proverbial ‘moral of the story’ is that a seller should err on the side of caution and disclose any characteristics which might constitute a defect. At the same time, human nature is such that a seller might be reluctant to do so for fear of not achieving a true selling value.

In practice many transactions involving immovable property include a property disclosure document which is in a sale agreement. This is a useful checklist in which sellers state whether items within the property and included in the sale are in good condition or not, and whether certain extra items are included in the sale. Such a document offers both buyers and sellers a measure of protection. Sellers cannot afterwards be accused of not disclosing certain latent defects to the buyers when the sale was concluded.

For buyers, it gives a good idea of what would need replacing or repairing and whether there may be expensive defective items which would influence the offer they make.

As to the second misconception, many property buyers and sellers have incorrectly assumed the voetstoots clause is no longer applicable since the Consumer Protection Act (CPA) was implemented in 2011. The voetstoots clause still applies to property transactions when the seller’s ordinary course of business is not property, such as individuals who are selling their own houses or apartments. However, the provisions of the act apply to developers, investors or speculators, who make a living from buying and selling property. These provisions override the common law concept of the voetstoots clause. Queries can be directed to Bryan Hack via email on hack@capebar.co.za

1 ELLIS AND ANOTHER v CILLIERS NO AND OTHERS 2016 (1) SA 293 (WCC)