Purchasing property and compliance certificates – great expectations?

(Article by Laurence van Blerck - Chartered Accountant and an Estate Agent with Knight Frank Residential Property)

An estate agent should always encourage a seller to disclose any defects in the property prior to sale. Such disclosures should always be reduced to writing and be annexed to the agreement of sale. In addition, an estate agent must always convey to a prospective purchaser, all facts concerning the property which the agent should reasonably be aware of and which could be important to the prospective purchaser. 

Offers to purchase generally include a clause providing for the seller to obtain Certificates of Compliance for Water, Electrical, Beetle, Gas and Electrical Fencing, where applicable. Buyers rely on these certificates but to what extent are they helpful? Often the new owner moves into the property with different appliances (and possibly a faulty appliance or two) with different electrical and water usage requirements and unexpected problems arise. Who is now responsible for resolving the problems, the current or previous owner? It is therefore useful to summarise the purpose and scope of these certificates.

The Water Certificate, sometimes incorrectly referred to as Plumbing Certificate, is a compulsory requirement of City of Cape Town. It is concerned with water wastage and does not cover general plumbing nor is it an indication that the plumbing has recently been upgraded. It is not designed to cover secondary leaks after the point of consumption as the water has already been used for its intended purpose. Issues with the sink and blocked drains for example are maintenance matters and are not covered by the certificate. Low water pressure and discoloured water should be checked with your supply authority. It is worth repeating that it is not a plumbing certificate! 

The Electrical Compliance Certificate confirms that the installation complies with the Occupational Health and Safety Act (OHSA) and certain regulations. It is important to note that the ECC merely states that the electrical installation is safe and not necessarily that it is in working order.

The installation is not upgraded as part of an electrical inspection. The certificate will ensure that appliances are connected to the installation via approved means but workings of the appliance itself are not checked in terms of the certificate. It does not provide any guarantee on fitted electrical equipment such as a built in stove or air-conditioning unit. 

The Beetle certificate is not required by law but a purchaser can insist upon it being obtained. Where a purchaser requires a bond, the financial institution will insist upon a beetle certificate. Sellers and buyers must be aware that the specific wording of the “beetle clause” in the agreement of sale will determine the scope of the inspection. There are no legal standards or requirements for this type of inspection. This certificate does not cover pest control, not every type of “gogga” is covered. The advice of the estate agent can be helpful here as the wording can vary, depending on the clause in the particular agreement of sale. It is helpful to provide the wording of the clause to the inspector so that it is readily available at the time of the inspection. The beetle inspection is a visual one, checking for exit holes and dust. The lack of such holes is no guarantee as the larvae may not yet have matured to the point where they have exited, leaving holes. It is therefore difficult to say that a beetle certificate is valid for any specific period of time. Remember, inaccessible or unexposed timbers under heavy furniture, fitted carpets etc. are unlikely to be inspected. 
The issuing of Gas and Electrical Fence certificates are also governed by OHSA. Their scope is more clearly defined and are less likely to result in problems of interpretation.

When engaging a service provider to undertake modifications or repairs to installations during ownership of your property, always insist that the changes confirm to the latest safety standards and insist that you are provided with a supplementary compliance certificate. It will help to ensure a safe environment for you and your family and reduce duplication of work and costs, when you sell your property and need up to date certificates.

If either the seller or buyer believes that the quality of work is questionable, then they should arrange for the service provider to return to the property to remedy defects that should have been fixed in terms of the respective compliance certificate. If still not satisfied, the appropriate regulatory authority should be contacted for assistance. For example, the Electrical Contractors Association is obliged to assist the general public at no extra cost to the buyer or seller.

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