SA Consumer Protection Act (CPA) - The Truth of the Matter

Agents have borne the brunt of bad jokes for years and are viewed by many as unscrupulous. While there are undoubtedly agents out there who are notably lacking in conscience, is it really fair to lay all the blame at their feet? The agent is, after all, often a creature of instruction and at the mercy of what the seller tells them. If a seller is unwilling to tell the truth, then is it really fair to blame the agent when things go wrong?

Sellers do not always tell the truth. They often hide faults, they don’t always disclose the real reason why they are selling, and despite all this they still expect the estate agent to perform their mandate without quibbling.

One of the very first things a buyer will usually ask an agent is why the homeowner is selling. Those who are selling for financial reasons often do not want to disclose that they are in financial trouble. However, this nugget of information can actually help the agent sell the property faster if, of course, the property is being sold at a market-related price. Buyers have a strange knack of sniffing out trouble and are, more often than not, able to figure out if the homeowner is having financial difficulties, even if this is denied. The problem with failing to disclose the true reason for selling is that buyers, once they have figured out the reason may become wary of the seller, believing that if they can lie about something as trivial as the reason for selling, they can lie about other bigger issues regarding the property itself.

Agents have long been viewed with suspicion and while certain misgivings are occasionally justified, it is often not the agent attempting to pull the wool over a buyer’s eyes, but rather the seller who has been sparing with the truth. The Consumer Protection Act (CPA), however, is going to change the way that agents do business. As things stand, the Act does not apply to a seller who does not ordinarily sell property for a living. Estate agents on the other hand do and if the courts find that an agent has neglected to disclose pertinent information and facts then agents can be held responsible which could, in the worst case scenario, lead to the sale being overturned. It appears that agents are no longer going to be able to take the sellers word for it and they are going to have to delve into the property’s history to ensure that everything that the seller has stated is true.

Although no cases have yet come to the fore, it stands to reason that it is only going to be a matter of time before some disgruntled buyer who has been misled is going to take the matter to court. It also stands to reason that the agent is not going to shoulder all of the blame and if the seller has failed to disclose or has lied about important relevant information the agent is undoubtedly going to join the seller in the proceedings.

Although many South Africans believe that the voetstoots clause, which essentially means that a property is sold as is, offers a blanket of protection to the seller, in actual fact, it doesn’t. Nobody can legally sell a property without informing a buyer of any faults that they are aware of and if, at a later stage, it becomes evident that the seller has attempted to deceive the buyer, the courts will usually compel the seller to rectify the problem at his expense. If the fault is severe enough, the courts even set the sale aside.

Thousands of homes are bought and sold without any complications and both parties walk away from the deal happy with their lot. However, there are many instances where things do go wrong and sellers need to understand that the more buyers understand their rights, the harder it is going to be to try to offload a less than perfect property, unless all of the facts are disclosed.

In other words, if it was regarded as important to be truthful before, it is now imperative under the CPA. Buyers need to know all the facts and if they don’t get them or are misinformed, they now have the law firmly covering their backs and their wallets.

Courtesy: Lea Jacobs

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