HAVE YOU COMPLETED A PROPERTY CONDITION REPORT BEFORE SELLING YOUR IMMOVABLE PROPERTY?

What is a Property Condition Report?

As of February 2022, section 67 of the Property Practitioners Act (“the Act”) mandates the completion and signing of a Property Condition Report (PCR) by the owner of immovable property (“property”), containing specific details about the condition of the property being sold (or leased).

Who is to complete the Property Condition Report?

• The Property Condition Report (PCR) is completed and signed by the seller before the conclusion of a mandate with the property practitioner (estate agent).
• Additionally, a copy of the completed PCR is to be provided to any prospective purchaser (or lessee) who intends to make an offer for the purchase, or who intends to enter into a lease agreement.
• Should a PCR not be completed and signed, it does not mean that the agreement is null and void, but it can be construed that no defects were disclosed.

Why does a Property Condition Report have to be compiled?

• Sellers have a legal obligation to provide accurate and complete information regarding the condition of the property.
• Failure to disclose known issues or misrepresentation can lead to serious legal consequences, including, but not limited to, a delay in registration of the property transaction, that can, and most definitely will, have serious financial implications for both the buyer and the seller.
• Therefore, it is essential for sellers to provide truthful information to avoid any legal complications.

What are the consequences if it is not completed?

• According to the Act, a property practitioner is to fulfill the requirements mentioned in section 67 and should they fail to meet these requirements, the affected party (buyer or seller) can hold them liable.
• Additionally, the Property Practitioners Regulatory Authority has the power to impose an appropriate sanction. Therefore, should a property practitioner be found guilty of violating the Act, he or she may be fined.
• After the property is registered in the purchaser’s name, the latter may discover defects that were never disclosed by the seller.
• The offer to purchase generally includes a “voetstoots”-clause that indemnifies the seller against claims for damages in respect of any defects relating to the property, unless the purchaser can prove that the seller was aware of the defects and failed to disclose them.
• The “voetstoots”-clause is meant to protect the seller. However, South African law outlines specific situations where the seller cannot use this clause as a defense to a claim for damages by a purchaser.
• However, it is also important that the purchaser thoroughly inspects the property for any visible defects before making an offer to purchase the property.

What is our point?

• We understand that the responsibility of completing the PCR lies with the property practitioner.
• However, as a seller, you should prepare the PCR report before offering your property for sale to ensure that you adhere to your obligation as a property owner

Do you need assistance?

We would gladly assist you in preparing such a report. Therefore, please feel free to contact us for any assistance.

Although we make every effort to ensure the accuracy and reliability of the information presented in this publication, neither the author of the article nor the publisher can be held responsible for any consequences resulting from actions taken based on the information or recommendations provided. Our material is intended for informational purposes only.