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Odendaal v Ferraris In a recent decision of the Supreme Court of Appeal, handed down on the 1st September 2008 the court considered, inter alia, whether non compliance with the National Building Regulations was a latent defect and whether a seller can accordingly rely on the voetstoots clause in a sale agreement. The facts of the matter were as follows: 1. Odendaal (the seller) advertised her home for sale early in 2006. 2. Ferraris (the purchaser) viewed the property in March 2006. At the time that he viewed the property he was unable to gain access to an outbuilding. He was nevertheless assured by the agent that the outbuilding was in a faultless condition. 3. Ferraris accordingly made an offer to purchase the property, which offer was accepted by Odendaal. 4. Upon taking occupation of the property Ferraris gained access to the outbuilding and found that the ceiling showed signs of water damage and would have to be repaired. He also noticed that there was also a sewer manhole cover in the middle of the laundry. 5. Ferraris contended that the seller and agent had deliberately concealed these defects from him at the time that he viewed the property. 6. Ferraris conducted further investigations with the municipality in order to satisfy himself that the buildings confirmed to the statutory requirements. 7. He discovered the following: a. The plans for the outbuilding were approved, subject to the sewer system being rerouted; b. The building plans for a carport had been rejected on three previous occasions due to non-compliance with the National Building Regulations; c. The garage did not comply with the regulations as there was no firewall or firedoor. 8. In the circumstances Ferraris instructed his bank not to continue with the registration of the bond; and informed the seller that he would not instruct them to continue with such registration until such time as the defects were rectified. 9. The seller’s attorneys gave notice to the purchaser that by instructing the bank not to continue with the bond registration he was in breach of the sale agreement and that should he not rectify the breach within 7 days the seller could elect to cancel the agreement and apply for the eviction of the purchaser. 10. The purchaser refused to do so and the seller cancelled the agreement and applied to court for the eviction of the purchaser. At the hearing of the matter the seller maintained that the purchaser’s refusal to withdraw his instruction to the bank was a breach of the agreement. In answer to the purchaser’s complaint relating to the defects she contended that the voetstoots clause protected her. The purchaser maintained that the defects had been concealed from him and the seller could accordingly not rely on the voetstoots clause. He indicated further that he was entitled to sufficient time to investigate the extent of the defects and the costs to remedy them in order that he could claim a reduction in the purchase price (in terms of the actio quanti minoris), or cancellation and refund of the purchase price (in terms of the actio redhibitoria) These are known as the aedilition remedies. The court a quo (court of first instance) found that the purchaser was entitled to a reasonable period of time in which to decide whether to rely on the aedilition remedies. Accordingly, the purchaser was entitled to instruct the bank to hold off on the registration of the bond and he was not in breach of the agreement. The seller appealed the decision of the court a quo to the Supreme Court of Appeal. In its decision the Court discussed the application of the voetstoots clause and indicated in passing that each case has to be dealt with on its own merits. For the purchaser to succeed he would have to show that the seller made a fraudulent misrepresentation in relation to the defects. The burden of proving these allegations lies squarely on the shoulders of the purchaser. In its analysis of the evidence before it the Court came to the conclusion that the Purchaser had failed to show, on a balance of probabilities that the seller has fraudulently concealed the defects from him – “The respondent’s allegations are, in the main, vague, unspecific and devoid of sufficient evidential support. He therefore failed to lay the basis for a finding of fraud in these proceedings, and thus cannot avoid the consequences of the voetstoots clause” The purchaser’s instruction to the bank to stop the registration of the bond was therefore unfounded and did constitute a breach of the agreement. The seller was wholly within her rights to cancel the agreement and apply for the eviction of the purchaser. The purchaser was accordingly ordered to vacate the premises on or before the 30th November 2008. So, what does this mean for you as the purchaser of property? Prior to this matter the authorities appeared to suggest that a purchaser could assume that all Building Regulations had been complied with. Clearly, this is not the case. If you purchase a property ask the seller whether plans have been approved for all the buildings, swimming pools, car ports, awnings or any other improvements to the property. (By doing this the seller has to disclose to you that plans have not been passed, if he does not then he will not be permitted to rely on the voetstoots clause.) But what happens if the seller does not know as he has never checked whether a predecessor in title obtained approval for a structure. He would not be fraudulently misrepresenting the nature of the property to you, the misrepresentation would be innocent – and the seller can rely on the voetstoots clause. It would therefore be prudent, whenever purchasing immovable property, to make enquiries with the municipality and to satisfy yourself that all statutory requirements have been met.

Written by: Haydn Friis