Section 67 (1) of the Property Practitioners Act No. 22 of 2019 (the “Act”) states that a property practitioner must:
“(a) not accept a mandate unless the seller or lessor of the property has provided him or her with a fully completed and signed mandatory disclosure in the prescribed form; and
(b) provide a copy of the completed mandatory disclosure form to a prospective purchaser or lessee who intends to make an offer for the purchase or lease of a property.” (emphasis provided by the author)
In terms of subsection 2 of Section 67, the completed mandatory disclosure form must be signed by all relevant parties, and then attached to the agreement of sale or lease of a property, to which it forms an integral part. In the event that no mandatory disclosure form is completed, signed or attached as required, then the agreement in question must be interpreted as if no defects or deficiencies in the property were disclosed to the purchaser.
Subsection (3) of Section 67 creates the potential for personal liability for the property practitioner, in that it provides that any property practitioner who fails to obtain a signed mandatory disclosure form from a seller or lessor, or having obtained such form fails to provide a copy to a prospective purchaser or lessee, may be held liable by an affected consumer.
An example of where a property practitioner will face personal liability is where after registration of transfer a purchaser becomes aware of a serious defect in the property which pre-dated the date of sale. In such instance the purchaser would be in a position to hold the property practitioner personally liable for the costs incurred in repairing the defect in question. The basis for this liability is that had the purchaser been known of the issues prior to putting in his or her offer, then either he or she would have negotiated the purchase with such knowledge in mind or alternatively not put the offer in.
Importantly, in terms of the prescribed Mandatory Disclosure Form in the Regulations to the Act it is specifically stated that the form does not constitute a guarantee or warranty by the property practitioner in question. The role of the property practitioner is therefore to:
- Obtain the fully completed and signed mandatory disclosure form from the seller or lessor;
- To provide a copy of the mandatory disclosure form to a prospective purchaser or lessee; and
- To ensure that the mandatory disclosure form is signed by all relevant parties and attached to a sale or lease agreement.
In our next article we will examine whether the mandatory disclosure form has any impact on the “Voetstoots Clause”.
Article by David Campbell