Here are your options if you buy a house with a leaking roof or damp issues

The prospect of finding your dream home may distract you from seeking out the ‘nitty gritties’. Some of the details that a potential homeowner might miss could be as small as a loose door handle or as big an issue as discovering damp and structural issues to the home.

Alan Rubin, head of Ooba Home Loans advises homebuyers to clearly understand the risks of purchasing a home with latent defects and protect themselves accordingly.

“Once you have been pre-approved for a bond through a bond originator like Ooba Home Loans, things can move quickly. It’s so easy to get swept up in the excitement of making an Offer to Purchase (OTP) that you fail to observe pertinent issues around the home.”

What is a latent defect?

“A latent defect is a material defect that was not visible after reasonable inspection. Examples of latent defects can include leaking roofs, faulty geysers, and damp issues where you can’t see the issue on inspection.”

Rubin said that taking transfer of a home with latent defects is a common occurrence among homebuyers who haven’t thoroughly inspected the home prior to purchase. “Some potential buyers might feel too uncomfortable to conduct a thorough investigation before signing an OTP or haven’t been warned about looking into latent defects prior to purchasing a home.”

“Important to remember,” said Rubin, “An offer to purchase is legally binding and a home is sold ‘voetstoots’.”

The term ‘voetstoots’ means that any problems with the home’s structure, visible (patent) or not (latent) defects are the buyer’s problem – not the sellers (unless the seller covered them up). “’Voetstoots’ protects the seller, except in cases where the seller hides or chooses not to disclose defects in a disclosure form before the sale – this is viewed as fraud.”

The good news

Rubin says that there is good news for homebuyers under Section 67 of the new Property Practitioner Act 22: “Section 67 of the Act states that an estate agent can only accept the mandate of a sale if the seller or lessor of the property has completed and signed a mandatory disclosure form.”

This form gives the seller the opportunity to disclose any defects or issues with the property that they know about. “Important to remember, this is focused on what the seller knows and not what the facts are.  The two can be different.”

The potential homebuyer will have sight of these disclosures before signing the OTP and it will be attached to the agreement.

“In addition, every home must receive electrical and plumbing compliance certificates (as well as electric fencing and gas certificates if applicable) prior to transfer.  This offers buyers peace of mind on those ‘big ticket’ items.”

With this in mind, Rubin said that buyers should remain vigilant and not be afraid to point out issues as they discover them.

“You are making one of the biggest investment decisions of your life so don’t feel bad to conduct a thorough investigation. Ask the estate agent for a closer inspection prior to signing an OTP; view it during the day, view it at night, take someone reliable with you and inspect it in detail.

“Or utilise the services of a specialised home inspection company, although that will come at a cost which will be for the buyer’s account,” Rubin said. “Do what you need to do to make sure that you are comfortable and that everything is in working order. You don’t want to get into legal disputes down the line, so do the groundwork upfront.”

For those vying for their dream home against other homebuyers, the urge to sign on the spot may be too hard to resist, however, Rubin said that you need to be sensible and look for latent defects first. “Rather take an extra day to make sure that you are 100% comfortable with the home.”

What to do if you find a defect after moving in

If you are an unlucky buyer whose seller hid a defect, you do have the option of making a claim against the seller, so long as it is made within three years from when you discovered or could have known about the hidden defect.

Aside from the costs of litigation, which can be expensive, you also have to prove that the seller deliberately concealed the defect if there is a voetstoots clause. It’s best not to leave it to chance, and inspect the property if you have any concerns.

“If a dispute arises around latent defects in your home purchase before or after registration of transfer the matter can, by agreement, be referred for arbitration or determination. If that option is not listed in the sale agreement the parties should try to resolve it between themselves, before applying to the courts for resolution,” said Rubin.

“Legal costs can quickly outstrip the costs of repairing or replacing the disputed item, so this route should be avoided if possible. Don’t let the risk of a defect put you off buying your dream home though. Simply be aware and be informed.”

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Here are your options if you buy a house with a leaking roof or damp issues