Keeping your promises

Estate agents throughout South Africa have received a warning from several branches of the Institute of Estate Agents.

The new Consumer Protection Act makes it essential that there are no ambiguous or deceptive phrases in their promotional literature or the sales documents. The Act even protects the buyer against misleading verbal statements by any person acting on behalf of the seller. It is particularly insistent that people with limited education or speaking another language should have all agreements carefully explained to them.

Discussing these matters recently, Anton du Plessis, CEO of Vineyard Estates, said a recent High Court case (Guthrie and Another vs Etango Game Lodge and Another) shows just how careful sellers must be in making promises they may not be able to keep – whether this is done in the official sales document or the property's advertising.

Etango's promotional literature apparently promised that among the perks that they offer those who bought land from them (and paid their levies) would be a new clubhouse and wellness centre with a gymnasium, a squash court and a pool, an electric connection point on their property, and a six seater game drive viewing vehicle for the owners' use. They also undertook to see that the game reserve was fully stocked, that it had certain "specified" game and that only cull-hunting would be allowed.

After completing their house on their newly purchased erf, the Guthries found that a) no clubhouse was being built, b) game was not plentiful and was being captured and sold, c) there was no game drive vehicle, and d) there was no electric supply point to their home.

On taking these matters to court, the Guthries obtained satisfaction on every count except that they could not get a court order authorising an immediate start on the clubhouse as no date for this had been set in the agreement.

The electrical connection was authorised immediately as was the delivery of the game viewing vehicle within 30 days – and all game killing or selling halted.

Etango argued that, as no body corporate had yet been formed anddisputes had to go through this body, the Guthries had acted unconstitutionally. However, the court pointed out that section 36 (1) of the Sectional Title Act rules that as soon as any person other than the owner acquires a unit in a sectional title scheme, a body corporate comprising the developer and the new owner will automatically be deemed to have come into existence – and all subsequent owners become members.

Du Plessis said that in SA today property selling efforts will have to be "very disciplined" and vague statements and promises could now become "ammunition" for buyers. Where promises are not kept, he said, or where it is clear the buyer did not understand the contract, immediate cancellation of it will be possible – with total compensation to the "misled" party.

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