Latent and Patent Defects
- You have just purchased your dream home. On your possession day you’re busy unpacking and you find damp on the bedroom cupboard back wall, which is also an external wall to the garden. The floor of the cupboard is covered in mould.
- You put a pot on the stove to boil water for a much needed cuppa and off goes the power due to a faulty stove plate (which is not covered by the electrical certificate of compliance) .
- You sit down in your new lounge to ponder these few problems and you notice termites. Further inspection shows that the wooden lounge floor is in fact infested with termites.
- With that the heavens open with the first rains of the season, and a leak in the roof floods your bedroom.
- After such a rough start, you step into your shower just to find that there is no water pressure. Furthermore, you see water seeping through the tiles meaning there is a burst water pipe in the wall.
All these are nightmares for any home buyer. Many people believe that any of those situations would never happen to them. Well, it does happen; quite often, in fact.
The first thing you do is run for your Offer to Purchase legal document to see what recourse you have against the seller:
SCENARIO 1 – Conditions specified in OTP
You saw all these problems at the time of viewing the property and you specified that the seller would have to fix all these problems in your Offer to Purchase which was accepted by the Seller by his acceptance of your offer.
The problem is the seller’s. Contact your agent and Conveyancer immediately. Hopefully payment has not yet been made to the Seller.
If the Seller has received his money and refuses to fix the problems, your OTP is enough evidence for you to win any application to the courts.
SCENARIO 2 – Patent (Known) Defects
The Offer to Purchase included the Seller’s list of known defects which included all of the above defects.
You signed this defects list, admitting your knowledge and acceptance of the defects at the time of your offer.
The problem is yours and you have no recourse against the Seller.
Note: any easily visible or obvious defects eg broken tiles, cracked baths, broken railings, broken light covers, missing skirtings (unless covered by furniture), holes in carpets (unless hidden by another carpet or furniture), broken cupboards, missing cupboard handles etc do not need to be disclosed by the seller, and it is not his responsibility to fix them. These defects fall under “voetstoets” (sold as is).
SCENARIO 3 – Latent Defects
(Known by the Seller and purposely and willfully concealed by the seller)
The Seller did not disclose any of these problems in his defects list.
None of these defects were apparently visible to you, the purchaser prior to moving in, and by law the Seller had to disclose these defects to you.
These are material defects (have a monetary value) due to the fact that you may not have purchased the property had you known about these defects, or alternatively you may have offered a lower price.
The Voetstoets clause does not protect the Seller in a circumstance where he did not tell the truth.
The problem is the Seller’s… however unless he willingly fixes the problems, you will probably have to sue him in a court of law.
This does become a problem because you will have to prove that the owner in fact knew about these problems, and that he intentionally hid them from you or purposely did not disclose them. Eg the carpet was clearly hidden from you when you viewed the property and therefore your chances in court would be good.
SCENARIO 4 – Latent Defects
(Seller claims he had no knowledge of the Defect)
Much as you may not believe the Seller, he could claim that he did not know about the mould in the cupboard, did not know about the termites, or the leaking roof or the pipe for the shower.
The Voetstoets clause, if in the Offer to Purchase, would protect the seller unless you are able to prove that he was in fact aware of the defects, and purposely hid them from you.
Sometimes in this situation, the buyer would be forced to cut his losses and move on. Legal action is expensive, and unless you are able to prove without a doubt that the seller is not telling the truth, to possibly lose even more money in legal fees is just not worth taking the chance.
To avoid all possible future law suits the following practices for both seller and purchaser should be followed:
Sellers should disclose all known conditions of the property. If the condition is disclosed or readily apparent on the property, the chances of a lawsuit being commenced post-closing would be greatly diminished. This includes patent defects that are visible to the naked eye, as well as latent defects like structural issues. The agent should then inform all prospective buyers of any defects the property may have.
Examples of patent defects include broken windows, wall cracks, sagging gutters, missing or broken tiles, broken light switches, cracked swimming pool surround, broken cupboards, rotten woodwork, cracking paintwork and burn marks on carpets.
Examples of latent defects include leaking roofs, faulty geysers, structural issues like structural weakness of the roof, rising damp, faulty pool pumps, rusted internal pumps, damp patches that only become obvious during heavy rain and incorrectly installed ventilation fans.
Should you as the seller not inform the agent and buyer about a fault that you are aware of, the buyer may cancel the contract or seek redress through the courts.
Buyers should carefully review the seller's disclosure statement and also ask your agent to inquire whether there are any other conditions, latent or apparent, that may affect the property. Once this question has been asked, the potential buyer has effectively shifted the burden to the seller to fully disclose all potential material issues that might affect the property.
As such, although a purchaser may be eager to move into the beautiful new home he or she has just found, it is suggested that the purchaser perform his or her due diligence prior to closing on a property.