No disclosure, no deal is the rule for ‘bargain’ properties

According to the National Credit Regulator, more than 10-million South Africans are having trouble paying their bills at the moment, and many of the property owners among them are selling now in order to pay off some debt or cut back on their monthly expenses.
“In fact, the latest FNB Property Barometer shows that at least 14% of all residential sales currently (or about one in every seven sales) are being driven by owners selling to relieve financial pressure on their households,” says Berry Everitt, CEO of the Chas Everitt International property group.
“And this is helping to create a classic ‘buyers’ market’ in most parts of the country, with an increasing supply of stock and excellent opportunities for homebuyers and investors to acquire properties at highly competitive prices.”
However, he says, they need to be very wary of bargain-basement purchases, bearing in mind that sellers who are so cash-strapped that they are willing to sell for less than market value will probably not have done any home maintenance for quite some time.
“In addition, there are always those who, desperate to sell, will give their property a superficial makeover with the deliberate intention of distracting buyers from certain defects that they cannot afford to repair.”
Writing in the Property Signposts newsletter, Everitt says unwary buyers can then get stuck with these defects and have to spend a lot more than they had anticipated, just to get the property up to standard.
“In fact, they could easily end up spending more than if they had bought a higher-priced property in the first place and to avoid this possibility, buyers must be sure to deal only with a reputable estate agency like Chas Everitt International, because we require all our sellers to sign a full disclosure document listing all faults and defects of which they are aware, so that potential buyers can be informed about these, and make their decision to purchase - or not - accordingly.”
Meanwhile sellers should note, he says, that this practice is in line with the Consumer Protection Act (CPA) - and a Western Cape High Court judgment in 2015 which means that property sellers can no longer rely on a general “voetstoots” or “as-is” clause in the sale agreement to absolve themselves of responsibility for defects that the buyer might only discover after the sale has gone through.
“Previously, buyers who signed an offer to purchase containing a voetstoots clause would have to prove that a defect had knowingly and deliberately been concealed with the intention to defraud them if they wanted to claim damages from the seller, which was usually very difficult to do.
“Now, however, it has been made very clear that when there is a voetstoots clause in the sale agreement, that agreement must also specify exactly which defects are included in the “as is” condition of the property and are thus being accepted by the buyer.
“In short, a bargain is not bargain if the sales agreement is not compliant with the spirit of the CPA and the above judgment. It is much more likely that someone is trying to hoodwink you into buying a money-pit.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 May 2018
      Extreme weather appears to be the new normal, evident by the volume of insurance-related disputes reaching the industry watchdog’s desk. To avoid a situation in which your insurer refuses to pay up, you should proactively ensure that your home is well-maintained and ready for whatever winter has in store.
    • 22 May 2018
      As the impact of technology on the real estate industry becomes more significant, it is clear that there is a need for an objective look at not only traditional real estate models but also online and other alternative low-commission real estate agencies, to examine what they offer and what their impact might be.
    • 22 May 2018
      According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, dealing with some sort of neighbour dispute is an unavoidable part of life unless, perhaps, you choose to live on a remote small holding for the rest of your life.
    • 22 May 2018
      Buyers feel that they are getting value for money in the Northcliff area without having to compromise on aesthetics and amenities
    • 21 May 2018
      Secure living is one of the growing property trends in South Africa and Nooitgedacht Estate in Stellenbosch certainly ticks the right boxes for buyers who want a secure, exclusive lifestyle in one of the Boland’s most sought-after estates, says Pam Golding Properties.
    • 21 May 2018
      With sectional titles growing in popularity, an increasing amount of homeowners simply do not have the garden space to install a tool shed in their backyard.
    • 18 May 2018
      Home improvements are a great way to add value to your property, but not all of us have bottomless pockets for a full-on renovation. Lucky for us, there are plenty of affordable DIYs that can spruce things up over a free weekend.
    • 18 May 2018
      The need for large office spaces is slowly eroding as more and more employers choose to allow their staff to work remotely. As a result, the home business model has grown in popularity, with many new entrepreneurs choosing to start their business from home rather than in a business district. But, what are the legal implications of operating a business in a residential area?
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us