Dear all
I am noticing a few transfer instructions coming across my desk where the mandatory condition report is not attached to the OTP. Sometimes (mostly) this was overlooked when the instruction was sent and it only gets sent upon request, duly signed by all parties. But on the odd occasion I am met with “Oops I clean forgot! Is it too late now?”
Allow me to remind everyone of the consequences of not having this report completed and signed by each and every party, and attached to the sale/lease agreement.
The PP Act clearly and expressly states that with every sale or lease of property, a report is mandatory, before you take the property to market. Note – before – not after. If you fail to do this and this is brought to the PPRA’s attention, you will be fined R15 000. Even though the Act states that the PPRA “may” fine you up to this amount, you can just as well read “will”!
Secondly, it must be in the prescribed format. Not negotiable. And failure to adhere to this – another R15 000.
Thirdly, if you do not have this form completed and/or you do not make it part of the OTP / lease (i.e. get the buyer/lessee to also sign and acknowledge that he/she has read it) the Act clearly and expressly states that it will be assumed that no defects were disclosed.
And fourthly, Section 67(3) states that “A property practitioner who fails to comply … may be held liable by an affected consumer”. What does this mean?
Well, in simple terms it means this: If the buyer does discover a leaking roof 6 months later when it is winter, and on the form the seller completed, he/she clearly stated that the roof was leaking, but you failed to disclose this to the buyer, you will now be liable to fix the roof. Simple, there is no hiding from this. So add maybe another few (or many) thousands to the R15 000 fine that now awaits you.
Or, you fail to get the form completed at all. The seller however did know of a leaking roof, but failed to point this out because he/she was under the false impression that voetstoots means he need not disclose this, whilst, had he/she been presented with the form, it would have alerted him/her to this need to disclose. Then you are also going to be held liable in terms of the Act because you failed to exercise your duty of care.
And lastly on the point of what does this mean for you, we have no high court judgments yet to tell us how the courts intend to interpret the Act when it comes to an agent’s liability. Within legal circles there is uncertainty whether the courts will interpret it to allow for “strict liability”, in other words, that you will now automatically held liable for ANY AND ALL latent defects that are discovered, whether the seller knew of them or not, full stop – Or – will it be interpreted to mean that the legislator was merely cautioning agents of the potential consequences by saying that you “may be held liable”.
Question you must ask yourself is simply this: Do you have R15 000 to just throw away, or maybe substantially more? Do you really want to be “that agent” who is taken to court in order to get certainty over the interpretation and possibly be on the receiving end of one very big hiding? My advice to you is this: Do NOT take a property to market without this form. It is really that simple.