Download Home Inspection Services South Africa – Don`t Buy Until you

Home Inspection Services South Africa – Don’t Buy Until you have an
Inspection!
Whether intended for you, or for a rental tenant, the purchase will certainly be exciting, and
probably daunting, as the possibilities present themselves:
The house looks amazing – but what about the things that I can’t see? What are the hidden
costs? What if I buy someone else’s problem?
Beware the “Voetstoots” Or “As Is” Clause
How many prospective buyers are aware that they sign their rights away when they sign the
“Offer to Purchase” agreement, which includes the “Voetstoots” or the “As Is” clause. This
clause is designed to protect the Estate Agents in regards to the Consumer Protection Act.
According to the Law Society of South Africa, 98% of Estate Agents put this clause into their
agreements, and the buyer is well within their rights to have it excluded from the “Offer to
Purchase.”
It would be advisable to have a home inspection on your property as this will probably be the
biggest purchase that you will ever make.
What you should get with a home inspection service:
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Peace of mind;
An unbiased opion on the condition of the property;
Photographic report plus a written report;
Protection from unscrupulous sellers;
Maintaining ethical and technical standards;
To protect buyers and estate agents from unethical practices.
“Few would risk buying a pre-used car without an automobile inspection so why risk your life
savings on a property that you can’t be sure about?
Source: Director of Affairs for South Africa
Consumer help: estate agents
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Guidelines for buying and selling property through an estate agent, how to protect your interests when
doing so, and what you can do if things go wrong.
Estate Agency Affairs Board
A body established by government to protect your interests when you buy and sell property through an
estate agent. You can complain against an estate agent whom you suspect has violated either the law or the
code of conduct governing the industry.
You can also claim repayment from the Board's Fidelity Fund if an estate agent has stolen or mismanaged
your money. Their web site includes a wealth of related information and resources, such as guides for
property buyers and guidelines for estate agents.
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Estate Agency Affairs Board
The Disciplinaries section provides information on how to lodge complaints.
WHY HOUSECHECK?
How does home inspection fit into the picture of property sales?
Property transfers in South Africa can be very slow. Many sales are delayed as a result of deals
being finalised without proper investigation into the financial soundness of home buyers and
home sellers, or into the soundness of the property itself.
The three major causes of delays in finalising transfers are:
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The failure of home buyers to pay their transfer costs and deposits and purchase price when
required to do so.
The failure of home sellers to resolve issues with their bond holders and with SARS.
Disputes over property defects which can cause major delays before the transfer is
registered, or even lead to the cancellation of the sale.
Many property buyers when taking occupation of a property, discover defects that were not
disclosed to them at the time that the sale was finalised. These defects range from hidden
damp and wall cracks, to defective alarm systems and swimming pool pumps, from roof leaks
and geyser malfunctions to security gate breakdowns.
The Consumer Protection Act
The discovery of defects post sale can lead to “home buyers remorse”, to arguments and
disputes and sometimes also to expensive legal action.
The new Consumer Protection Act (CPA) which came into force on 1 April 2011 drastically
reinforces consumer rights and this new law is part of the wave of consumerism which has been
sweeping the Western world. If the experience of other countries is anything to go by, then the
rights of South African consumers will become steadily more protected into the future with
additional consumer legislation. The protection of the consumer under the CPA will also be
sharpened once the provisions of the CPA have been clearly defined in test court cases.
Ismail Laher of Deneys Reitz Inc , writing in Lexusnexis Property Law Digest, March 2011, says
the effect of the CPA will be felt by the property industry. Some of the areas in which the CPA
will impact the property industry are:
Voetstoots sales:
The CPA will prevent the sale of property voetstoots when that sale occurs in the ordinary
course of business, unless the purchaser has been expressly informed of the specific condition
of the property, including all defects and the purchaser has agreed to accept the property in that
condition.
Return of property or refund of all or part of the purchase price:
In terms of the CPA, should the courts decide that an agreement was, in whole or in part, unjust,
unreasonable or unfair, then the court may make any order it considers to be just and
reasonable in the circumstances. This includes: ordering the seller to return all or part of the
purchase price to the buyer, to compensate the buyer for damages and costs and/or to cancel
the transaction.
Estate Agents:
The CPA will also affect estate agents.
The home buyer is a consumer when dealing with the estate agent and will enjoy protection
under the CPA as regards implied warranties and rights.
Under the CPA the seller of a property, or the estate agents acting on their behalf, must not
express or imply to the purchaser any false, misleading or deceptive representations concerning
a material fact. The seller or agents may also not use exaggeration, innuendo or ambiguity
regarding a material fact concerning the property. Also the seller or agent may not fail to
disclose a material fact concerning the property and may not fail to correct an apparent
misapprehension on the part of the buyer.
The CPA specifies that it is misleading to falsely state, imply or fail to correct a buyer’s
misapprehension that any property has characteristics which it does not have, may lawfully be
used for, or is capable of being used for.
In cases where the seller has been forced by the courts to compensate the buyer in terms of
the CPA then the estate agent may also be at risk. This is because , should the estate agent
have been at fault regarding the information communicated to the buyer, then the estate agent
may find themselves liable to the seller for all or part of the losses of the seller. This is because
the estate agent is providing a service in the ordinary course of business and so the relationship
between the seller and the estate agent will also be governed by the CPA.
Under the CPA the seller will be a consumer when dealing with the estate agent and will
therefore enjoy all of the implied warranties and rights enjoyed by the buyer when dealing with
the estate agent.
Direct Marketing:
Property in South Africa is often purchased as a result of direct marketing by real estate
agents. For example estate agents will deliver fliers en masse, putting these into people’s post
boxes under doors and into email inboxes. The CPA gives consumers the right to rescind a
sale which resulted from direct marketing, without reason or penalty.
Upfront disclosure ensures peace of mind for all parties – home buyers, home sellers and
agents
A simple way to circumvent the current debate over the effect of the CPA on property sales lies
in having an independent inspection of the home prior to the sale and including this inspection
report as part of the sales agreement.
We have a number of articles which have appeared in the popular press added to our
HouseCheck Facebook – page and continually update this as they appear.
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The Home Inspection Industry Elsewhere
In the United States and in Britain properties being sold need to pass inspection by an
independent, accredited expert before the prospective buyer can obtain a home loan. Although
the system was initially introduced to give financial institutions peace of mind, a successful
inspection holds big benefits for both buyer and seller.
In the United States and elsewhere there have been great advances in the sales of residential
properties through the pre-qualifying analysis of both buyers and sellers to ensure trouble free
deals and fast property transfers.
Home inspection as a service industry has been available in the USA and Canada for the past
three decades. It is growing so much in popularity that Entrepreneur Magazine has predicted
that 90% of all homes purchased in the next few years in the USA will be subject to proper
inspections. At present the percentage for the USA is approximately 66%. In other words 66%
of all second-hand homes are inspected before they are sold.
It is interesting to note that Money Magazine a popular American publication, ranks the home
inspection industry as one of the ten professions considered to have the best growth potential in
the near future.
It is for these reasons that the home inspection business in many parts of the world is now a
vital part of the property industry.
According the Norman Becker (The Complete Book of Home Inspection – McGraw Hill) In the
United States of America no more than 1-2 per cent of homes sold in 1971 had a property
inspection. By 2000 says Becker more than 77 per cent of homes sold in the United States had
a property inspection. The picture is similar in Britain (where property inspectors are called
“property surveyors). The property inspection industry in Australia and elsewhere is also
growing. It makes sense!
NHBRC:
The National Home Builders Registration Council (NHBRC) requires that all new houses be
inspected during the building process to ensure that they comply with the relevant Act. There is
currently no legal requirement for an inspection of second-hand houses before a sale takes
place.
The Home inspection industry in South Africa
In South Africa there has been a fledgling property inspection industry for about 30 years but
most South Africans still don’t make use of property inspectors when buying, selling, building or
altering a property.
The role of the professional property inspector is to provide common sense, factual answers
regarding the actual physical condition of the property. Using his training, extensive knowledge
and experience, the property inspector will document all significant observable defects, assess
and explain the significance of each defect and, where practical, provide an informed estimate
as to the cost of repair.
In South Africa it is a fact that most people still pay more attention to the condition of a second
hand motor vehicle than to the condition of a property they are interested in buying. That’s
pretty weird when one considers the amount of money it takes to build, buy or maintain a
property in South Africa.
Comprehensive and understandable information on the components of South African homes is
not readily available to estate agents, buyers or sellers – unless one is willing to wade through
the National Building Regulations, or the NHBRC manuals, or the technical specifications of the
many suppliers of various building materials!
To avoid expensive mistakes, anyone who is thinking of buying or owning property needs
accurate information regarding the property they are interested in. They need answers to
questions such as:
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How long will the roof last before needing replacement or repair?
Are there any problems with damp in the walls, roof leaks or storm water run-off?
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Are there any structural concerns regarding the foundations, walls and roof?
Are the visible cracks in the walls serious – does it mean the house will fall down?
Are the geyser, plumbing and drainage systems all in order?
Is the electrical system adequate and safe?
Have all of the improvements on the property been approved by the local authority?
Has the building been well maintained?
What maintenance and repairs are needed – immediately and within the foreseeable future?
The rules of the property game have now changed because the new Consumer Protection law
places the responsibility on the seller and his agent to make full disclosure to the buyer of the
actual condition of the property which is changing hands.
The problem, of course, is that very often the seller and his agent are not aware of what may be
serious defects in a property. This may be because the seller and the agent have not climbed
up onto the roof or crawled into the roof cavity. Sellers and their agents generally also lack the
expertise and experience to identify structural problems, damp and so on.
Potential for the SA Home Inspection Industry
The South African home inspection industry has great potential for development. There is
currently a shortage of competent and qualified home inspectors who are able to undertake
home inspections according to accepted international standards and procedures.
Building Credibility
The second-hand home inspection industry in South Africa is small and unregulated at
present. Home inspections are sometimes undertaken by under-trained or inexperienced
inspectors and there is no standardised operating procedure to ensure quality of service.
For home inspection to gain credibility and establish itself as an industry in South Africa it
needs:
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Clearly defined home inspection procedures based on international standards and
experience.
An minimum training standard and generally accepted qualification for South African home
inspectors
A generally accepted system for routine home inspections before transfer of properties. To
gain traction the rationale for such a system would need to be accepted and required by the
major South African banks as a pre-requisite for the banks providing home finance.
Legislation and other rules and regulations to define standards of practice and training and
a code of ethics. The Consumer Protection Act is a welcome first step in moving to protect
consumer rights this regard.
A formal, independent governing body to regulate the home inspection industry in South
Africa
The Home Inspection Training Academy – THITA
HouseCheck has acquired contractual rights to the well established THITA course developed
by Max Lourens and based on an inspection methodology that is unique to South Africa and its
conditions and building practices. The THITA course is based at NQF4 level and it is
anticipated that the course will become the legislated benchmark for certification in South Africa
as a home inspector.
All HouseCheck franchisees and inspectors must do the THITA course and pass the qualifying
examination. This THITA course is offered in-house by HouseCheck and the cost of this
training for HouseCheck franchisees is covered by the initial franchise fee.
John Graham of HouseCheck has also written a 150-page HouseCheck Training Manual which
provides HouseCheck inspectors with additional technical information regarding the construction
process and the various defects and products which the HouseCheck inspector is likely to
encounter when inspecting South African homes.
In addition HouseCheck has acquired the rights to and developed customised inspection
software based on the highly successful Home Inspector Pro (HIP) software. The templates of
the HIP software have been edited to suit South African building conditions, practices and
regulations.
This software, which is licensed to HouseCheck franchisees, enables HouseCheck inspectors to
produce higher volumes of inspection reports – all of a consistently high professional standard.
South African Society of Home Inspectors – SASHI
HouseCheck supports SASHI which was established by Max Lourens some years ago.
SASHI strives to entrench the suggested standards and code of ethics promulgated and
approved by the American Society of Home Inspectors (ASHI). The South African society,
SASHI, also seeks to ensure that all interested parties have access to and a say in the
development and growth of the home inspection industry in South Africa.
Home inspectors must be THITA accredited in order to qualify for membership of SASHI.
International Association of Certified Home Inspectors – INTERNACHI
HouseCheck subscribes to the on-going educational principals and requirements of
InterNACHI. John Graham, CEO of HouseCheck is a member of InterNACHI.
Other HouseCheck Affiliations & Trade Associates:
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National Home Builders Registration Council – NHBRC: HouseCheck takes into account all
of the NHBRC recommendations and regulations when inspecting South African
property. John Graham, CEO of HouseCheck, is an NHBRC accredited home builder.
Institute of Estate Agents of South Africa – IEASA: HouseCheck is an affiliate member of
IEASA and thereby seeks to enhance the professional standards of South African estate
agents.
Property Transaction Kit (PTK) (Pty) Ltd: HouseCheck is a shareholder in and supports the
efforts of PTK to standardise and facilitate the disclosure of all material information at an
early stage in the property transaction. PTK is supported by well known conveyancing
attorneys, IEASA and by various associations including those for electricians, plumbers and
pest controllers.