A common clause found in all sale agreements, is the clause known as “VOETSTOOTS”, which basically means “as it stands” or “as is”.
This clause is inserted in the sale agreement for the main purpose of protecting the Seller. This clause indemnifies the Seller against any claim that may arise from damages in respect of any defects (latent or patent) found on/in the property.
There are two types of defects that are referred to when dealing with property, the one being patent defects, which are the visible defects in a property. For example, a broken door or window, a crack in the wall ect.
Latent defects, the second category of defects that we look at, are the hidden defects. As mentioned in the name, these defects are hidden and not visible through a reasonable inspection unless pointed out. For example, a crack in the foundation of the swimming pool or rotten beams in the ceiling.
In the past, the “VOETSTOOTS” clause would protect the Seller, fully, against all defects in/on the property, whether the defects are latent or patent. However, recently, the courts have found this clause to pose problems, especially in instances where latent defects are found. The courts have now ruled that if the Seller was aware of a latent defect and failed to disclose this to the relevant parties or tried to conceal the defect intentionally, the “VOETSTOOTS” clause can not be used by the Seller as a defence. The Purchaser would then have a bona fide claim against the Seller for the defect and the Seller would be liable to compensate the Purchaser or remedy the defect.
“The Seller knew of the defect and intentionally concealed it or should have reasonable known of the defect” – was the main “go to” for the courts in determining whether the Seller could rely on the “VOETSTOOTS” clause or not. However, this then posed further issues with the courts as proving the intent and knowledge of the defect by the Seller was a difficult task. Remembering the phrase “innocent until proven guilty.”
To resolve this issue, the courts developed the practice of a disclosure form, whereby the Seller discloses all latent and patent defects in/on the property, that they are aware of or should reasonably be aware of. The disclosure form is a mandatory form that is completed by the Seller and then signed and accepted by the Purchaser. By having a disclosure form, should a dispute regarding defects arise, the courts are then able to revert to the disclosure form in order to resolve the issue.
Therefore, whether selling or buying property, it is always best to go through an estate agent, who has professional expertise in properties, as the agent will be able to go through the disclosure form in depth with the Seller, to ensure all defects are disclosed, thus protecting the seller and then explain the form in detail to the Purchaser, thereby protecting the Purchaser in ensuring they are fully aware of the property they purchasing.