CPA will make it essential for property marketers to be fully understood
All three pieces of the legislation that form the much discussed King III package the National Credit Act, the New Companies Act and the Consumer Protection Act place greater still importance on protecting the individual and his rights and this is likely to have noticeable spinoffs for the residential property development and marketing sectors, says Shiraaz Hassan, Marketing and Sales Director of Asrin Property Developers.
To give just two examples, he said, the banks are now encouraged to assist credit defaulters to undergo debt counselling and if they do this they will be given additional time to find a solution. Similarly any organisation contemplating litigation against a small firm is advised first to try mediation.
With the Consumer Protection Act regulations likely to be publicised by March 2011, said Hassan, property companies will be entering a new era.
As I understand the Act, said Hassan, any person in the supply chain (which includes the agent) can be held responsible for any defaults or defects that may occur in the property within the first six months.
What is more, if these are of a serious nature, it is just possible that the buyer, on taking the matter to court, will be granted a replacement product.
Furthermore, the Act as now proposed, comes down very hard on misrepresentation. If the buyer can show either that certain aspects of the deal were not clearly explained to him or were not mentioned he will be entitled to compensation no matter what the document he has signed says.
The client will also in many instances be allowed to cool off and cancel the contract if he does so shortly after signing it.
These and other consumer protection clauses, said Hassan, will make it essential to coach buyers in what might be lengthy sessions and to ensure that they do fully understand what they are agreeing to. In the long run the CPA will be beneficial.
Legal statements from Grant Gunston and other attorneys, said Hassan, have indicated that although the Act may initially offer buyers escape routes, the principles of voetstoots will probably still stand.
Property is so big an investment that it cannot be given back or refunded in the same way as an appliance, a vehicle or a short-term service, he said. Prevailing legal opinion seems to be, therefore, that although great care will have now to be taken to explain contracts, the new Act will not unduly hamper residential sales.
Article by: www.asrin.co.za