The CPA is on my side… Right?
Warming hearts across South Africa, the Consumer Protection Act (CPA) seeks to protect the consumer from being taken advantage of in business transactions. Break a vase in-store? It’s no longer your problem. Your new DVD player doesn’t work? Take it back to the seller and decide whether you want to have it repaired or replaced. It seems that, in a few easy steps, the CPA has made sure that consumer purchases are no longer a nightmare of fine print. However, few consumers know that the CPA is not a blanket Act – it doesn’t cover you simply because you are a consumer. The CPA only applies to the consumer buying from a supplier (someone who sells goods/services in the course of their daily business). Buying a piece of furniture from your next door neighbour? You’re not covered by the CPA as this is a consumer-to-consumer transaction.
What does this have to do with buying a house?
Too many consumers presume that the CPA covers all transactions, and why not one of the largest purchases you will ever make – your dream home? If you buy that home from another consumer, then this is not a business-to-consumer transaction and you’re not covered. What about estate agents? It is important to remember that, when estate agents sell houses, they do so not as suppliers (in the same way that car dealers sell cars) but as intermediaries who are contracted by sellers to sell their property. They are required to operate within a mandate but that does not mean that they are governed by the CPA. If you buy a property with a leaky roof, you can’t go back to the estate agent and demand your money back. In terms of CPA Regulations, an intermediary must disclose any relevant information that he/she may reasonably be expected to be aware of but this does not mean that the estate agent is required to climb into your roof, uncover structural problems, and present them to you. In this way, as a buyer, property inspections become your responsibility.
And, there’s more bad news. Many estate agents are asking sellers and buyers to sign disclosure documents, stating whether they know of any major defects in their properties, releasing them from liability at a later stage. These defects range from patent defects (visible defects such as cracked walls) to latent defects (defects that are not easily visible but may impair the use of the property, such as rising damp).
Unless you are a structural engineer or qualified building inspector, it is unlikely that you will be able to identify latent defects or their potential repair cost, which can run into hundreds of thousands of rands!
Sellers are liable for latent defects that existed at the time of the sale but, by signing a disclosure document, buyers often sign away their rights to that claim, effectively making the defects the buyer’s problem. You do not have to sign a disclosure document and have the right to conduct a thorough home inspection prior to signing a sales agreement.
What should I do?
The law cannot protect you from ignorance. Investing in the services of a reputable home inspector, with National Association of Certified Home Inspectors (NACHI) accreditation, should be an important part of any property purchase. As is standard practice in Europe, home inspections should take place before any sales agreement is signed.
Before buying a property, Inspect-a-Home’s CEO, Eric Bell recommends hiring a qualified property inspector who will deliver a comprehensive report on the interior and exterior of the property. “It is essential to receive an objective and fair assessment of your property from a reputable home inspection company. Costly oversights can be avoided, giving you peace of mind about your purchase,” says Bell.