Consumer Protection Act

Consumer Protection Act will impose new responsibilities on estate agents

Estate agents across the country have been concerned about the new responsibilities that will be imposed on them by the Consumer Protection Act (due for finalisation in March/April 2011) and it is clear now, says Grant Gunston, senior director of Grant Gunston Attorneys, that agents will, as “links in the supply chain” be held accountable for:

  • any action which on later investigation could be characterised as dishonest, unfair or misleading;
  • any aspects of the property which could be deemed of low or defective quality and/or of questionable value in terms of the price paid;
  • any documentation which could be deemed difficult to understand or insufficiently explanatory; and
  • any statements in the advertising and promotion of the property which are exaggerated or misleading.

Gunston commented that certain provisions in the new Act could in the next year or two be interpreted by the courts as rendering the voetstoots clause partially or wholly no longer applicable.

“If latent defects become apparent in the home within six months of its being transferred to the new owner, it may well be argued that these have reduced the value of the home and the seller will, in terms of the new Act, have to remedy them or pay compensation.”

Equally stringent, said Gunston, could be the ruling that the onus will be on the supplier/salesperson (in a property transaction the seller and his estate agent) to ensure that the terms and conditions of the transaction are so well understood that later comebacks on the grounds of misrepresentation are not possible.

“If the buyer later claims that he did not understand the sale document, he could have grounds for cancelling the entire agreement.”

Gunston said that the CPA is one of the most far-reaching and potentially complicated bodies of legislation ever to come onto the statute books in South Africa – but, he said, it has the potential to stop “rip-off” sales tactics and high pressure selling in which the recipient finds that he or she has signed for a home or property without being aware of certain implications and drawbacks.

“Estate agents, developers, landlords or builders will no longer be able to take refuge behind signed legal papers. The home will have to be in good condition, fairly priced and the sales agreement must have no down-the-line conditions and “extras” which the buyer can later claim were not explained to him.”

Article by: www.grantgunston.co.za