The prospect of finding your dream home may distract you from seeking out the \u2018nitty gritties\u2019. 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.<\/p>\n
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.<\/p>\n
\u201cOnce you have been pre-approved for a bond through a bond originator like Ooba Home Loans, things can move quickly. It\u2019s 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.\u201d<\/p>\n
What is a latent defect? <\/strong><\/p>\n \u201cA 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\u2019t see the issue on inspection.\u201d<\/p>\n Rubin said that taking transfer of a home with latent defects is a common occurrence among homebuyers who haven\u2019t thoroughly inspected the home prior to purchase. \u201cSome potential buyers might feel too uncomfortable to conduct a thorough investigation before signing an OTP or haven\u2019t been warned about looking into latent defects prior to purchasing a home.\u201d<\/p>\n \u201cImportant to remember,\u201d said Rubin, \u201cAn offer to purchase is legally binding and a home is sold \u2018voetstoots\u2019.\u201d<\/p>\n The term \u2018voetstoots\u2019 means that any problems with the home\u2019s structure, visible (patent) or not (latent) defects are the buyer\u2019s problem \u2013 not the sellers (unless the seller covered them up). \u201c\u2019Voetstoots\u2019 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.\u201d<\/p>\n The good news <\/strong><\/p>\n Rubin says that there is good news for homebuyers under Section 67 of the new Property Practitioner Act 22: \u201cSection 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.\u201d<\/p>\n This form gives the seller the opportunity to disclose any defects or issues with the property that they know about. \u201cImportant to remember, this is focused on what the seller knows and not what the facts are.\u00a0 The two can be different.\u201d<\/p>\n The potential homebuyer will have sight of these disclosures before signing the OTP and it will be attached to the agreement.<\/p>\n \u201cIn addition, every home must receive electrical and plumbing compliance certificates (as well as electric fencing and gas certificates if applicable) prior to transfer.\u00a0 This offers buyers peace of mind on those \u2018big ticket\u2019 items.\u201d<\/p>\n With this in mind, Rubin said that buyers should remain vigilant and not be afraid to point out issues as they discover them.<\/p>\n \u201cYou are making one of the biggest investment decisions of your life so don\u2019t 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.<\/p>\n “Or utilise the services of a specialised home inspection company, although that will come at a cost which will be for the buyer\u2019s account,\u201d Rubin said. \u201cDo what you need to do to make sure that you are comfortable and that everything is in working order. You don\u2019t want to get into legal disputes down the line, so do the groundwork upfront.\u201d<\/p>\n 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. \u201cRather take an extra day to make sure that you are 100% comfortable with the home.\u201d<\/p>\n What to do if you find a defect after moving in<\/strong><\/p>\n 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.<\/p>\n 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\u2019s best not to leave it to chance, and inspect the property if you have any concerns.<\/p>\n \u201cIf 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,\u201d said Rubin.<\/p>\n \u201cLegal costs can quickly outstrip the costs of repairing or replacing the disputed item, so this route should be avoided if possible. Don\u2019t let the risk of a defect put you off buying your dream home though. Simply be aware and be informed.\u201d<\/p>\n
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