ALL that anxiety we experience about buying property? – It’s well justified. As a case decided by the Supreme Court of Appeal this week demonstrates, there are indeed sellers willing to create fraudulent camouflage; who know, but disguise, a building’s serious faults.

Buyers Raymond Banda and Patricia Fynn thought they had everything covered when they acquired a property in Gauteng from Frank and Alicia van der Spuy.

It had a thatched roof and, aware that thatch can be tricky, they wanted some assurance it would be watertight. Responding to their concerns, the sellers added a crucial undertaking to the sale agreement. It read, ‘Seller to transfer guarantee on thatch roof to purchaser from the contractor.’

In fact, however, as the sellers later admitted in court, when they signed that undertaking ‘there was no guarantee in existence, because the time period for which it was furnished had expired.’

Although the high court concluded that giving a ‘guarantee’ under these circumstances was ‘thoroughly misleading and … fraudulent’, the judge went on to find there was nothing that could be done for the buyers. The property had been sold voetstoots – as is – and so the sellers could not be held responsible for the roof disaster that became obvious after the sale went through.

The deeply unhappy buyers challenged that decision. Their task now was to prove to five appeal judges that the sellers had ‘requisite knowledge … of the latent defects in the roof which they fraudulently concealed’.

What had caused the roof to leak in the first place? According to the expert witnesses there were two main problems. First the roof was too heavy for the supports: the wooden poles should have been reinforced. Without reinforcement the roof was collapsing downwards and sideways, forcing openings through which rain water flowed down the inside walls.

The second problem was the roof pitch. Thatch roofs require a pitch of 45 degrees whereas this roof was 30 degrees or less. As water was thus unable to run freely off the thatch it collected on the dried grass which, in turn, was rotting away.

According to the experts the only way to ‘repair’ the roof was ‘to demolish and reconstruct it in accordance with a properly engineered design with the correct pitch.’

The appeal court found that as a result of repairs done to the roof before the sale, the sellers were aware of a significant part of the problem. They also knew the ‘guarantee’, on which the sale depended, was worthless. The evidence thus showed them untruthful and dishonest in relation to these key questions.

The seller’s lack of serious inquiries to one of the expert witnesses who had examined the roof at the time of the repairs, illustrated his unwillingness to be exposed to the truth.

It was obvious the sellers did not ‘possess an honest belief in the adequacy of the repairs’ to the roof. This, and the fraudulent guarantee, showed that they knew about the roof’s structural problems and the inadequate repairs: they were obliged to have disclosed this information to the buyers.

The buyer’s evidence was that he would not have signed the contract without the ‘guarantee’. And if the seller had told him there was a problem with the roof he would have asked for an expert assessment of what it would cost to fix.

It was thus quite clear, observed the appeal judges, that the buyers were ‘induced by fraudulent misrepresentation to conclude the sale agreement or, at least, to pay the purchase price agreed upon.’

Even though the sellers were unaware of one of the causes of the leaking roof, they knew about the other. But by concealing the existence of the defect they did know about the sellers lost the protection of the voetstoots clause and the buyers were thus entitled to the difference between the purchase price of a habitable house and its value with a defective roof.

So how to estimate the compensation due to the buyers? The buyers had expert estimates that it would cost R450 000 to repair the roof properly by rebuilding the internal walls and gables to accommodate the increased pitch. The appeal court judges accepted the estimate and ordered the sellers to pay this amount to the buyers, plus interest and legal costs.

All kinds of expensive lessons here for both buyers and sellers – and I imagine that after the repairs, inevitably long and messy, the last thing the buyers will want is a roof-wetting party.

Banda v van der Spuy