A defect is considered latent if it was not visible or discoverable upon reasonable inspection and the Purchaser was unaware of the defect. Though a latent defect may be present, it may not always amount to a breach of contract and the Seller in most instances remains victorious when the Purchaser wishes to cancel the sale agreement.
What is clear is that the Seller benefits more than the Purchaser when a property is sold Voetstoots and disputes arise over latent defects. Purchasers are often of the view that they have no legal recourse, however, they may claim relief in terms of the Aedilitian Remedies, which will be discussed in more detail in this article.
Many sale agreements fall outside the ambit of the Consumer Protections Act (CPA). In such instances, the common law position prior to the commencement of the CPA remains and, depending on the facts, a Seller may be held liable for latent defects if the property is sold by means of the following:
a) actio empti(for damages);
b) actio redhibitoria(for repayment); or
c) actio quanti minoris(for price reduction).
1) Damages Actio Empti
Damages can be claimed by the Purchaser herein with or without cancellation of the contract of sale. This requires a breach of contract or fraud on the part of the Seller. The Purchaser must allege and prove not only that the object had a defect that was latent but also one of the following:
a) Warranty: The seller warranted as a term of the contract the absence of defects or the presence of qualities lacking in the object sold;
b) Implied term: The seller was a merchant or dealer who publicly professed to have skill and expert knowledge in relation to the kind of thing sold or was a manufacturing seller;
c) Fraud: The seller knowingly concealed defects, or knowingly represented their absence.
2) Repayment Actio Redhibitoria
This is an action in which the Seller may claim repayment of the purchase price and interest. In order to be successful with a claim for the actio redhibitoria, the Purchaser will have to show:
a) The object sold had a defect which, viewed objectively, substantially impaired the object’s utility or effectiveness for the purpose for which it was sold or for which it was commonly used;
b) The defect existed at the time of the sale;
c) The defect was latent – it was not discoverable upon inspection;
d) The Purchaser was unaware of the defect;
e) The Purchaser would not have purchased the object had he or she known of the defect;
f) The Purchaser is willing and able to effect restitution.
3) Actio Quanti Minoris
A Purchaser who is unable to prove the last two elements of the actio redhibitoria, is entitled to claim a price reduction with the actio quanti minoris. This reduction is the difference between the purchase price and the value of the object with its defect.
It is necessary, therefore, to allege and prove the actual value of the article with its defect. If the sale was one by measure, the price reduction will be proportional.
In most instances, this would require the Purchaser to obtain expert advice and cost estimates to quantify the price reduction that shall be claimed.
In conclusion, where a property is sold Voetstoots, Purchasers need to ensure that the Seller provides them with a detailed disclosure sheet of any patent and most importantly latent defects. Prior to signing the Agreement of sale, it is recommended that the Purchaser ensures that the Seller physically points out all the defects they have disclosed and are aware of.
Should necessary precautions not be followed, and a dispute does happen to arise from latent defects being discovered at any given point, it is important for the Purchasers to be aware of the legal recourse they may seek in terms of the Aedilitian Remedies.
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