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Article Three

Introduction and Subject matter three

Business Day: 8 April 2005

This column is brought to you by Peter Allsopp, former MD of the National Home Builders Registration Council and member of the Estate Agents Board 1996-2000, who is now in private practice providing trouble shooting and consumer protection services to Home Owners who are in difficulties with their homes.

This weeks article covers one of the most prevalent predicaments Home Buyers find themselves in, latent defects in recently purchased homes.

"Oh Mom, you should see the house, it's beautiful! As we walked in we could smell the leather lounge suite and the curtains were to die for! The pool and braai area were terrific, Derek said he would have some great parties for his mates in the pub room, it's on its own timber mezzanine deck above the living room.

As you walked through the house you could smell the jasmine. The kitchen had just been revamped and it even has granite work tops and a stainless steel hob."

"Carol, did you check out the maid's room?"

"No, we were so in love with the house, anyway the agent said there was plenty of room.

The agent said they had had lots of offers. Anyway, we just knew this was the place for us, so guess what Mom? We made an offer and they have accepted it! Isn't it great, just think in three months time, we'll be in our own home and be out of your hair.

Sorry Mom, what did you say?"

"No don't worry, the agent was great, she said every thing will be OK, she really knew her stuff."

The next week the Agent rings you and tells you everything is on track and come 1st June you can take occupation, but listen if you want to measure up for your curtains you had better come through this weekend as there won't be another opportunity before you move in. So, full of excitement you visit the house again and are introduced to the Seller for the first (and only) time. As you are measuring up, the lady of the house is very pleasant and tells you what a lovely time they have had in their two years in the house.
Why are they moving you ask?

Oh you know, she says, there is always another bigger/nicer/closer-to-the-kids-school house on the horizon and now her husband has got the promotion, they can move into the Manor up the road.

It's funny you think that smell of jasmine is not there any longer and did she know about this crack on the living room wall behind the curtain?

" yes," she said, "that was where they cut the wall and put the sound surround cable in. The plaster must have shrunk, but don't worry there are no other problems", she smiles.

Eventually the day arrives and your furniture truck pulls up outside your new castle, the agent meets you, hands over the keys and purrs away in her luxury German convertible.

You open the front door to be greeted with a rather musty smell and that strange hollow feeling in your stomach; you know the one you get when the traffic cop pulls out in front of you and you know you've been caught speeding.

There is something not right, but you put it down to the nervous excitement of your biggest purchase ever.

As the weeks go by, you can't figure out where the musty smell is coming from. Their house never smelt like this, it was all leather and jasmine, and you notice more and more cracks appearing. You stop and think, most of the cracks are in places where they had bookshelves/wall units/curtains. You ring the agent. No she says they didn't tell her anything about cracks or smells, anyway she says "The house was sold voetstoots".

What do you mean? You ask, suddenly feeling out of your depth.

"It means sold as seen, darling, anything wrong is not our problem, but don't worry, if there is anything wrong it will be covered by your home owner's insurance".

You spend an angry weekend waiting for the insurance guy to come out only to be told, "I'm sorry missus but the smell is from rising damp and those cracks are from the foundation settling. Both of these are excluded from your policy. For two reasons, one, they were pre-existing when you bought the house and two they are general exclusions anyway. Claim rejected! Sorry".

What can you do? How did your dream house become a nightmare and how can you prevent this from happing to you?

It is a simple answer but one so infrequently followed by even experienced buyers of property in South Africa. Get a specialist professional to undertake a "medical" on the house BEFORE you sign that offer to purchase. Or if the signing urge is just too strong to resist, make the offer subject to a successful inspection report. In many countries one cannot get a bond approved unless this report is provided to the financial institution, but alas this is not so in the Rainbow Nation.

The professional will undertake a pre-purchase inspection and report, which would give you the peace of mind regarding any potential problems, allow you to negotiate a deal with the Seller, or even in extreme cases, cancel the offer to purchase.

At Baobab we have seen cases just like Derek and Carol many, many times. The scenarios described really do occur on an all too frequent basis. Beware of houses where those automatic room fresheners are plugged into the wall at strategic places, they hide a multitude of smells: do not get taken in by the Seller's Castle-and-Garden magazine style furniture and fittings. Not only can they distract you from the building in which they sit, but they can also hide a myriad of problems: Don't be embarrassed to look into cupboards and wardrobes: suppress your natural pre-purchase excitement and use ALL of your five senses to try to detect undisclosed problems: Ask questions, are there any cracks/damp problems/roof leaks/pool problems and make sure you get the Agent to confirm the answers in writing! No we are not kidding. We are faced with unprovable verbal disclaimers on a daily basis. Since we have been working together with one of the well known agencies in Johannesburg they have created a tick-list that they get the Seller to sign before the point of sale confirming all the above and more.

This way the buyer already has the answers in writing.

Unfortunately many agents are not as pro-active. As long as the Seller does not disclose the problems, the agent cannot be censured for their own silence. One can only get protection from the Estate Agents Affairs Board if one can prove that the Agent misrepresented a known fact. How do you do this if the sales representation was all verbal?

Your home owner's comprehensive insurance policy does not cover you for anything but a defined "insured event", meaning that defects in construction or design, gradual deterioration and changes in soil conditions are all excluded.

There is some good news in these cases however. There is sufficient case law that has declared that where defects like Derek and Carol's existed, that were not disclosed or were wilfully concealed by the Seller, the buyers can claim damages from the Seller, within a given period. Now careful, as the onus of proof that the Seller knew of the problems and did not disclose them and/or concealed them lies with the Buyer. This is an area that professionals such as Baobab are experts in. We have the specialist equipment to detect concealed defects and we have achieved a fair degree of recourse against concealing Sellers.

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