Sellers aim to showcase their homes in the best light to attract buyers. However, hastily concealing damp issues with superficial fixes like Polyfilla and paint can prove to be a costly mistake.
Damp problems vary in severity, ranging from minor condensation to severe structural threats. Selling a property with undisclosed damp issues can significantly devalue the home, incur substantial repair costs, and cause delays in the sales process.
Despite the temptation to conceal dampness, it’s advisable for sellers to address the issue upfront. Failure to do so can lead to legal repercussions, as fraudulently concealing damp problems can result in litigation even after the sale is finalised.
A case recently brought before the High Court, that highlighted the proof and consequences of not disclosing or attempting to hide evidence of damp with Polyfilla and repainting, was argued based on the rule: “where a seller recklessly tells a half-truth or knows the facts but does not reveal them because he or she has not bothered to consider their significance, this may also amount to fraud… “a wilful abstention from establishing the true facts does not constitute a lack of knowledge”
The case:
- The buyer of the house only became aware of the severe damp problems in the ceilings and walls after taking transfer and when planning renovations.
- The sellers (a divorced couple) refused to pay for the repairs (costing just under R245k) and the buyer sued them for either damages or a reduction in the purchase price.
- Twice in the year of the sale, the ex-wife (living in the house) had called in contractors to repaint and do extensive repairs judging by the drum of paint and 24kg of Polyfilla used.
What the buyer must prove:
- Defects: That there were defects in the property at the time of the sale which “affected the use and value of the property”. The buyer had no difficulty in proving that the damp problems qualified as defects for this purpose.
- Latent, not patent: That the damp was a latent defect, not “obvious or patent” to the buyer. Latent defects are defects that “would not have been visible or discoverable upon inspection by the ordinary purchaser” so if the damp was a “patent” defect, the buyer should have picked it up. The buyer in this case could convince the court that the damp was not discoverable by her at the time of sale because of the extensive repairs done by the seller.
- Fraud: That the damp as a latent defect was not covered by the voetstoots clause, a standard clause which specifies that the property is sold “as is” and without any warranty. The effects of this clause is that the buyer agrees to carry the risk of latent defects, but only if there was no fraud on the part of the seller.
Consequently, the buyer had to establish fraud, by proving two things:
- That the sellers were aware of the damp and its consequences.
- That the seller deliberately concealed the damp with the intention to defraud.
- The following factors were central to the Court’s conclusion that both sellers had acted with fraudulent intent-
- The court did not agree that the sellers were unaware of the damp problems or hadn’t intended to fraudulently conceal them when looking at the facts – including the extent and nature of the re-painting carried out.
- The ex-wife’s claim to have been ignorant of the damp issues, despite the extent and nature of the “cosmetic repairs” she carried out, was rejected. As the Court put it: “At best for her, she remained wilfully ignorant of the underlying cause of the issues in the paintwork, she could not honestly have believed that the core issue had been remediated.”
- The ex-husband for his part admitted that he had known of damp issues in two rooms because of bubbling paint and a smell of damp, with the Court concluding that: “He appears to have taken no steps to ascertain how extensive or serious those problems were – but a wilful abstention from establishing the true facts does not constitute a lack of knowledge.”
- Perhaps most damningly of all, both the ex-husband and the ex-wife had signed the mandatory Property Condition Report (defects disclosure form”), in which they
- specifically stated that there were no latent defects in the property, including “dampness in walls/ floors”.
The court awarded damages to the buyer, emphasising the importance of full disclosure and honesty in property transactions. In conclusion, it’s far more beneficial for sellers to repair damp problems or disclose them upfront when selling their house in order to avoid costly legal consequences and uphold integrity in the sales process.