Defective Buildings

Buying a house or a building is an exciting and special occasion. What to do when that experience is spoiled after you have moved in and, after a couple of months, start to notice small cracks in the walls? At first you make them off as innocent "hairline" cracks and ignore them. Over time, however, these cracks seem to widen, until you realise that something is wrong!

Whether it is a spec home, or you bought it from a seller who resided in the property for years, whether it is a residential or commercial property and irrespective of whether it involves one of the universally recognised building contracts or a bespoke agreement - we have extensive experience in assisting clients with building disputes.

Where houses or buildings are concerned, the disputes which arise are mostly in relation to construction defects which were covered up by the seller, only to emerge once transfer of the property has taken place. When the new owner raises the issue, it is often met by seller referring the new owner to the "voetstoots" clause in the contract.

GENERAL

If you have fallen victim to buying a defective building or home, you may have a claim in which you either:

keep the contract in place and claim damages - this would be the damages suffered thus far (repair costs etc.) and that which will be suffered in future (future repair costs etc.); or
cancel the contract and claim damages - this would include a claim for the return of the building (registering the building in the name of the seller), repayment of the purchase price and payment of compensation for any damages (which is legally claimable) as a result of the breach.

WHAT CAN I DO?

If there has been a breach of contract, the innocent party has the option to cancel the contract if;

the contract has a cancellation clause and the innocent party has complied with all the terms of any breach clause contained in the contract; or
the breach was a material breach.

It is extremely important to make sure that you are entitled to cancel the contract beforehand, since an unlawful cancellation can in itself amount to an anticipatory breach of the contract and lead to a claim for damages against the party cancelling the contract.

WHEN CAN I CANCEL THE CONTRACT?

WHEN IS A VOETSTOOTS CLAUSE A DEFENCE?

The mere inclusion of a clause in a contract stipulating that the property is sold voetstoots, will not always be a defence to a claim by the purchaser if there is a defect in the property. The voetstoots clause is only a defence if the defect is a latent defect.

To be successful with claim where a contract contains a voetstoots clause, the purchaser will have to prove that:

the seller was aware of the latent defect when they entered the contract;
the seller deliberately concealed the defect;
the seller had a duty to disclose the defect;
the seller did not comply with his duty to disclose the defect.

A latent defect is a defect which was not visible or discoverable upon reasonable inspection by the purchaser, but only if the seller was also unaware of the defect.

Where the seller was aware of the defect, it is not a latent defect and the seller cannot rely on the voetstoots clause as a defence against a claim by the purchaser.