Purchasing property is a significant investment, and it's paramount that buyers are well-informed. A critical component of this process is obtaining building plans, essential for ensuring compliance with local municipal regulations. Unfortunately, buyers often find out too late, when they have already signed the offer to purchase or after taking transfer of the property. The implications of non-compliance can have costly implications, some of which can include fines or at worst, a demolition order. This article explores the legal recourse available to buyers in the event of absent building plans, across three scenarios: 1) the seller was unaware of the absence of plans, 2) the seller knowingly withheld information about the absence of plans, and 3) the seller believed plans existed but was mistaken.
Scenario 1: Seller unaware of absence of plans
Property sales agreements typically include a “voetstoots” clause, protecting the seller from being held liable for defects they were unaware of at the time of sale. If the seller genuinely did not know about the absence of building plans, this clause could limit the buyer’s recourse.
However, relief may be available through the Consumer Protection Act (CPA) 68 of 2008. If the transaction is within the scope of the CPA, the voetstoots clause might not apply, and the seller could be held accountable. However, it is important to note the caveat emptor principle, which means "let the buyer beware". Essentially, it places the onus on the buyer to perform due diligence before making a purchase. This shows the importance of obtaining legal advice and conducting a due diligence prior to signing the offer to purchase alternatively making the offer subject to a condition that a due diligence be completed to the purchaser's satisfaction (the wording of this is crucial, so please ensure you seek legal advice in this respect). Ideally, the purchaser should view the plans before signing the offer to purchase, should ensure that they are approved and that there are no deviations in the buildings built with regard to the approved building plans.
Scenario 2: Seller knowingly withheld information
When a seller intentionally conceals the absence of building plans, this constitutes fraud, and the voetstoots clause does not offer protection.
A buyer may have the option to rescind the contract and claim damages if it can be shown that the seller fraudulently misrepresented or concealed pertinent information. It should be noted however that the buyer would have the onus to prove that the seller acted with fraud and intent, which is not always necessarily easy to prove. To be clear, a buyer cannot simply allege fraud in order to attempt to rescind the agreement- there needs to be an evidentiary basis on which to support this claim, failing which the seller could claim damages for wrongful termination. Legal advice should be sought before relying on this claim.
Scenario 3: Bona fide mistake
In instances where the seller believed in good faith that building plans existed but was mistaken, the legal position is more complex. The buyer would have recourse available, but legal advice would need to be sought, as each case may have specific facts which are pertinent to the case, as well as the terms of the agreement.
Beware of prescription
It's important to recognise that there are specific time frames within which claims must be brought. Acting swiftly is vital to prevent your matter from falling to prescription, which would make it legally unenforceable if a special plea is raised in legal proceedings.
Purchasing property is a substantial undertaking, and being well-informed is key. When building plans are absent, your available recourse will depend on the specific circumstances surrounding the transaction. Spence Attorneys can support and guide you through these complexities. Our attorneys are adept in the complexities of property law and have advised on a number of intricate matters.
Reach out to Spence Attorneys at email@example.com for a consultation to obtain the support of seasoned attorneys. We can assist with matters throughout South Africa.
This article is provided for informational purposes only and should not be regarded as legal advice. Every legal matter is unique and this information may not be applicable to any specific case. You are encouraged to consult with Spence Attorneys or other legal professional to obtain advice with respect to any particular legal matter. Spence Attorneys does not assume any liability for reliance on the information provided herein, or in the event of any errors or omissions.