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CPA and the Home Buyer

Posted last August 19, 2011, 5:30 am in Real Estate report article

CPA and the home buyer The Consumer Protection Act (CPA) affords the house buyer (as “consumer”) specific  protection and rights. Likewisethe house seller and agent (as “suppliers of goods and services”) have specific responsibilities and liabilities under the CPA, says John Graham CEO of HouseCheck. Graham says that in terms of the CPA,  the house buyer has a right to expect that the property being purchased is of good quality, complies with all relevant legal standards and is without undisclosed defects.   The CPA defines “defects” as any imperfection that renders the property less acceptable than “persons would reasonably be entitled to expect in the circumstances”. Graham says that the traditional “voetstoots” (“as is”) no longer provides blanket protection for sellers and their agents.He points out that Section 55 (5) of the Act says: “It is irrelevant whether a product failure or defect was latent or patent, or whether it could have been detected by a consumer before taking delivery of the goods.”  However, Graham adds that the buyer’s right to receive a good quality property free of defects does not apply if the buyer has been specifically informed that the property was offered to the buyer in a specific condition and the buyer has “expressly agreed to accept the property in that condition” – Section 55 (6). Graham says the only real protection from liability under the CPA is for sellers and agents is to commission a home inspection report upfront and to make this inspection report available to potential buyers.  Graham also recommends that the Deed of Sale should include a declaration by the buyer that he is aware of the defects disclosed in the home inspection report. Even if a home inspection report is made available to the buyer, Graham says that during  a six month period after the buyer has taken delivery of the property, the buyer  can demand redress if previously undisclosed defects are discovered.  In terms of the Act this redress places an obligation on the seller to:  “repair, replace or refund” – Section 56 (2).  The CPA provides for a further three month implied warrant after these defects have been repaired – Section 56 (3). Graham points out that if the seller and estate agent have taken the precaution of commissioning a home inspection report, which has been disclosed up-front to the buyer, then the only potential liability remaining after the buyer has taken delivery of the property is for:Latent defects which could not be seen by the home inspector – these could include faulty plumbing in walls, roof leaks or equipment failure (for instance a burst geyser); observable defects which were somehow missed by the home inspector. Graham says HouseCheck is currently working with associates in developing a simple insurance product which will both protect South African sellers and estate agents from liability under the CPA .  He says this product will also provide buyers with peace of mind.  Buyers will know  that for the period of the insurance they will have no unexpected maintenance costs for their new property.  Graham says the insurance periods to be offered with probably be for 12 and 24 month and will involve a once-off single premium. Contact  CEO Housecheck John Graham on 083 3109 766 [email protected] for more information. Franchise owners Christelle Scherman on 072 7865 930   [email protected] and Timothy Mountjoy on 082 5743 835 [email protected]   Or visit our website: www.housecheck.co.za