Property experts know how to advise your clients

Property experts know how to advise your clients

MAIN IMAGE: Corlia van Zyl, director – property, at PH Attorneys

Corlia van Zyl

Estate agents play a pivotal role in uniting a willing seller with a willing buyer. Part of this role is to understand and help both parties navigate the legalities of a property purchase.

Corlia van Zyl, director – property, at PH Attorneys, explores when and how a buyer can hold the seller responsible for property defects. We’re not talking about voetstoots here but rather about latent defects.  

Can a seller be held liable for defects even a year after the cracks appear?

What happens when a buyer’s been living in their new house for a year or two when the issues start – cracks, and more cracks – all serious and structural? Can the previous owner be held liable for this, or has the buyer, now owner, waited too long?

In short, the answer is ‘yes’, but there is a time limit to institute legal action against the previous seller, and it would also need to be defects that are worth instituting a claim for.

In this article, we will not entertain the type of defects owners can claim for but will assume the defects are serious and structural and that the owners would have a claim for them. Rather, we will look at the question of whether the claim against the sellers can prescribe and if so, how long the new owner has before it does so.

It’s a question of prescription

The question regarding the prescription of a claim for property defects was discussed at length in the recent Supreme Court of Appeal case of Stemmet and Another v Mokhethi and Another (681/2022) [2023] ZASCA 127. In this case, the purchaser, within the first year of living in the property, noted certain structural cracks appeared and immediately instituted a claim with their insurance, which was rejected on the basis that the cracks were old and gradual. The cracks were previously closed and caused by the movement of the clay ground upon which the property was built.

Three years after becoming aware of the defects and after the rejection of their claim by their insurer, the purchaser issued a summons against the seller, claiming damages for the defects on the property. The sellers raised a special plea of prescription against the summons issued against them.

In terms of the Prescription Act, the time for prescription starts to run from the date the purchaser becomes aware of the existence of the defects as well as the identity of the person against whom action should be instituted against, and the purchaser will be deemed to have the necessary knowledge of the defects and the identity if he could obtain it by exercising reasonable care. Prescription runs for a period of three years from the above mentioned date, after which a claim will expire.

The test for the court to follow in cases of prescribed claims for defects on property is thus to firstly establish when the purchaser became aware of the existence of the defects and the damages arising from it and, secondly, did they at the stage of becoming aware of the defects know the identity of the person responsible for their damages.

The ruling by the Supreme Court of Appeal

The Supreme Court of Appeal applied the test to the facts of the case and noted that it was clear from the facts that the purchaser knew the identity of the person responsible for their claim, as there is no doubt that they purchased the property from the sellers who presented the property to them.

Regarding the first requirement of the test, the court noted that it falls on the sellers to prove that the purchasers were, three years before instituting the claim, in possession of sufficient facts to allow them to believe that they had a claim against the sellers. Thus, according to the court, the purchaser only requires the minimum facts necessary to institute an action for damages, and it is not necessary to know the full extent of its legal rights, nor have all the evidence that will be needed to prove your case to be able to stop prescription from running.

The courts will apply the above mentioned test to the facts of each case to conclude whether a claim for damages due to structural defects has been prescribed or not. It is therefore vital to make sure first of all whether the defects on a property are defects that the owner can institute a claim for damages and, if so, to ensure that they institute their legal action before their claim prescribes per the requirements as set out above.

In all cases, it is important not to delay, and immediately consult with an attorney should an owner become aware of any structural issues or defects in their new home to ensure they don’t suffer the same fate as the Mokhethis whose claim was held to have prescribed.

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