With immediate effect every sale will have to have a declaration by the owner of a property on his knowledge about the property that they are selling.
This means that an owner cannot hide any defects in the property that he is aware of as could have real consequences if they don’t declare properly.
The declaration must be signed by the seller when giving a mandate to an estate agent to sell his property and will be attached to the offer to purchase.
As part of the offer, it also must be signed by the buyer and the selling agent.
Its ramifications are broad.
Included in the declaration is whether the seller is aware of any problems with:
- roof
- electrics
- plumbing
- heating and air conditioning
- septic tanks and sanitary disposal systems (mainly for smallholdings)
- foundations, cracks, seepage, dampness, wet walls, unsafe concentrations of mould or defects in drains and sump pumps
- structural defects
- boundary disputes, encroachments or encumbrances
- remodelling and refurbishment affecting the structure
- additions or improvements done and confirm that required consents a (body corporate) and permits were approved (municipal approval)
- property that is historic or a heritage building
Many of these issues are quite technical – for example, few owners would know that any building over 30 years old could have been listed as a historical building.
Few sellers would know the state of their roof, whether there are encroachments or not.
Probably the most important aspect is the declaration that any changes that have been made to the property have been done properly.
Far too many changes are done illegally.
In sectional title schemes no changes may be made to the use of a part of the building without proper process being followed – such as turning garages into storerooms or building into stoeps.
And for individual properties, additions and changes are often made without obtaining municipal approval.
While many building departments are non-functional at present, a time will come when building regulations are going to be enforced.
Illegal buildings will have to be legalised, which means providing proper architectural drawings for approval.
The cost of these plans will be substantial plus the approval costs – who is going to be liable for these costs?
The big problem is that many plans departments have lost plans over the years but will be able to demand a full set of plans for the current building at the owner’s or maybe the seller’s cost.
Again, it is my opinion that more red tape has been added to sort out a small problem.
In the past a buyer who was unhappy and felt that they had not been given the full view of the property could seek relief with the courts.
Now everyone is being put in a position of making a declaration on the technical aspects of their home that they may have little or no knowledge about.
Having been in the property industry for nearly 50 years, in all that time I have come across a handful of problems of this type.
For new buildings we have the NHBRC where each builder must register.
They are supposed to ensure a high quality of building, but in my experience, they can do little to settle disputes.
This is simply going to burden the sellers with extra costs and do nothing to really assist the buyers.
Again, this is legislation that favours the buyer over the seller and gives ever more rights to buyers over sellers.
As it stands now a buyer can, if they want to, employ a home inspector to look over the property that they are buying.
If the seller has been fraudulent, they are entitled to take the seller to court.
But some sellers are selling a second-hand product.
They are not selling a perfect product but a used one.
And if there are serious defects on the property, they can be taken to court.
This new declaration is simply an overkill.
- Mike Spencer is the founder and owner of Platinum Global. He is also a professional associated property valuer and consultant with work across the country as well as Eastern Europe and Australia.