It sometimes happens that a consumer buys or rents property, unaware that the property has certain defects, only to discover them later. It also sometimes happens that the estate agent who marketed that property was aware of the defects but chose not to disclose them so that the consumer would not be dissuaded from taking the property, thus securing their personal gain at the expense of the consumer. The question that arises is whether, when this happens, the consumer can claim the repair costs from the estate agent.
The Property Practitioner’s Act
Estate agents are regulated by the new Property Practitioner’s Act. The purposes of the Act include the protecting consumers’ interests, ensuring that the sale and letting of property is done in a manner that is just and equitable, and providing redress in instances when things go wrong.
Mandatory Disclosure Form:
The Act requires the seller or lessor of a property to complete and sign a list of defects called a “Mandatory Disclosure Form.” The form must set out any defects which exist in the property, for example damp, a leaking roof, security challenges etc. Then, the estate agent must provide a copy of the completed form to any prospective buyer or lessee intending to make an offer for the property. Once an offer has been made, the form must be signed by all parties and attached to the sale or lease agreement.
If the Estate Agent does not take the above steps, the consumer will be able to hold them liable for their failure, and the sale or lease agreement shall be interpreted as if none of the defects in the property were disclosed to the consumer. The matter may be referred to the Property Practitioner’s Regulatory Authority (“the Authority”) which may impose an appropriate sanction on the Estate Agent. The Sanction may include the imposition of a fine.
Estate Agent’s Code of Conduct:
Estate Agents are also, in terms of the Act, subject to a Code of Conduct. The Code of Conduct requires Estate Agents to protect the interests of their client and to act in a way which upholds the integrity of Property Practitioner’s in general. More specifically, Estate Agents must disclose all facts in respect of the property which may be material to their client. Therefore, if an Estate Agent does not disclose that the property has certain defects, they may be in contravention of the Code of Conduct.
If the Authority finds an Estate Agent to have contravened the Code of Conduct, it may withdraw the Agent’s Fidelity Fund Certificate, impose a fine on the Agent, or reprimand the Agent and make note of their transgression on the Authority’s website.
Take-aways:
- When selecting an estate agent, type in the name of the agent you have in mind on the Property Practitioners Regulatory Authority website at https://theppra.org.za/home to see whether he or she has a note of any transgression of the law or their Code of Conduct noted next to their name. If they do, avoid that agent!
- Before you purchase or let a property, insist on getting a copy of the “Mandatory Disclosure Form” setting out any defects in the property you’re your estate agent. Use this list to negotiate down on the price / rent, or make repairs of all the serious defects before you move in a condition of your offer to buy or rent.
- The form must also be attached to the sale or lease agreement and signed by all relevant parties.
- If your estate agent does not take these steps, you need to be concerned about whether they are acting ethically and in your best interests, since they are breaking the law. You should complain to the Property Practitioners Regulatory Authority here: https://theppra.org.za/article/complaints_form.
- If your Estate Agent did not inform you of the defects in the property, the Authority may prevent them from working as an estate agent, impose a fine, order them to pay back their fee for the transaction and make a note of their transgression on the Authority’s website.
- If the undisclosed defects reduce the value of a property you’ve bought, or give you additional expenses to rectify, then you can claim the reduction or expenses back from the estate agent. Speak to a consumer attorney to assist you.
By Micaela Bebington