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PROPERTY NEWS
Voetstoots Clauses And Planning Permission
We know that a voetstoots clause protects a seller against latent defects. But is the fact that some parts of the building don't have planning approval a 'latent defect' that the voetstoots clause would cover?
There have been conflicting decisions in our High Court. Some say 'yes', some 'no'.
The judgments that say 'no' say so because those judges think that a lack of planning approval is not a physical defect in the property and only physical defects can be latent defects. They say that any lack of planning approval means that you get something that you did not buy (instead of being a latent defect covered by the voetstoots clause) - and that you can cancel or claim a reduction in price.
Those that say 'yes' say so because those judges think that any defect in the property - even one that is not 'physical' - is a latent defect.
This is important because as a seller you may not know what the position is with regards to planning approval - and will want the voetstoots clause to protect you.
On 1 September the Supreme Court of Appeal decided which approach was right.
In Odendaal v Ferraris [2008] ZASCA 85 it found that a lack of planning approval is a latent defect in the property and that 'a voetstoots clause ordinarily covers the absence of statutory authorisations'. 'The whole purpose of a voetstoots clause' the court said 'is to exempt the seller from liability for defects of which he or she is not aware. And where a seller's statutory non-compliance concerns latent defects in the property, as in this case, the seller ought to be entitled to invoke the exception' [ie rely on the voetstoots clause]. The court thus found for the seller.
Within limits a seller can thus rely on a voetstoots clause to protect himself or herself against problems with planning approval in the property he or she is selling.
This is 'within limits' because if the lack of planning approval concerns the whole building and the building can't legally be lived in then it isn't habitable and the buyer will not be getting what he bought - which was a house to live in. But if it is just a carport and an outbuilding, like in the case that the Supreme Court of Appeal decided, then the voetstoots clause protects the seller.
The role of the estate agent also attracted attention. The court pointed out that as the estate agent acts as the agent for the seller, any misrepresentation made by the agent is binding on the seller - even if the seller didn't know about it. In this case though the Estate Agent had not acted fraudulently, and their representations took the matter no further, as an innocent misrepresentation will not trump a voetstoots clause.
The judgment is to be found here: http://www.supremecourtofappeal.gov.za/judgments/sca_2008/sca08-085.pdf.
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