About Me

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I am a qualified Attorney. I specialise in Property Law, Commercial Law, Corporate Law and Trusts.
Please visit our website at www.prop-law.co.za for more details.
I am an elected Committee Member of the Property Committee of the Association of Pretoria Attorneys and through my involvement, I like to ensure that I am constantly at the "sharp-end" of Conveyancing Practice.

I am the elected Chairman on the Gauteng Council of SAPOA. The South African Property Owners Association (SAPOA) is the biggest and most influential institution in the property industry. SAPOA members control about 90% of commercial property in SA, with a combined portfolio in excess of R150 Billion (about $22 Billion). I am also on the National Council and the National Legal Committee of SAPOA.
Member of the Institute of Directors South Africa and Member of the Sirdar Governance Panel.

07 April 2014

Consumer Protection Act 'could be boon to dissatisfied customer'

When the Consumer Protection Act was first promulgated there was a scare-mongering and sensationalism about the dire consequences that it would bring about.  The property industry was no different and Estate Agents were singled out as targets for such scare-mongering.

A number of years ago, I addressed several groups of Estate Agents on the subject and highlighted the extremely limited circumstances that would lead to the Act impacting upon them.

Since this series of presentations, I thought that the sensationalistic reporting on this subject had died away.  However, it appears as if Mr. Bill Rawson wants to resurrect this topic.

If anyone would like me to dust off my old presentation and discuss this topic again at an appropriate forum, please let me know at gareth@prop-law.co.za

Gareth Shepperson
Commercial and Property Attorney

Consumer Protection Act 'could be boon to dissatisfied customer'

When the Consumer Protection Act was first promulgated many were worried that it would lead to regular post sale disputes in which the agent and the seller would be held responsible for any number of problems.

However, thus far this has not yet happened, says Bill Rawson, Chairman of the Rawson Property Group.

Nevertheless, said Rawson, it is by no means certain that at some stage in the future one or two of the 'trickier' clauses in the Consumer Protection Act will be invoked by dissatisfied buyers and as the act stands at the moment it seems likely that the courts would have to rule in favour of the plaintiff.

Asked to give examples of what he considers clauses that could prove to the disadvantage of a seller and his agent, Rawson mentioned:

1. The right to information in plain and understandable language

This section of the act, said Rawson, stipulates that all documents and 'visual representations' should be in plain language or a form which can be understood by 'an ordinary customer of the class of persons for whom the notice document or visual representation is introduced'.

The act adds that the customers in this case can be assumed to have 'average literary skills and minimal experience as a consumer of the relevant goods or services'.

'While all the major estate agencies have been at pains to comply with this ruling and reword their documents so that they are easy to understand, the simple truth,' said Rawson, 'is that most of us still have just one set of documents for all sellers and buyers and it is possible that those at the lower end of the literary scale can still find these difficult to comprehend.

It is also possible, therefore, that even though the document may have been run through with the buyer and explained to him, this clause could be invoked if the client later comes to believe that certain aspects of the home were not fully explained to him.'

The act, added Rawson, also stipulates that the description of the product must in no way be misleading or exaggerated. Here again, he said, a buyer who is buying without seeing the product, e.g. in a plot-and-plan development, could quite easily claim that any one several standard phrases used in the promotional literature had misled him and could use this as an excuse for cancelling his contract.

2. The right to return unsafe or defective goods and/or to cancel a sales contract; alternatively to be compensated for the defects

'This clause,' said Rawson, 'is quite clearly in an altogether different ballpark from the previous universally applied Voetstoots clause. So far as I know, this clause, too, has not yet had any serious repercussions, possibly because it has resulted in agents being a great deal more diligent about listing the defects in a home they are selling to the buyer prior to his signing for it.

Nevertheless, I suspect a time will come when it will be used to cancel an entire sale, even possibly if the purchase price has already been transferred and the documentation lodged with the Deeds Office.'

Asked what lessons can be learned from what he has said, Rawson said that the inherent dangers here make it all the more important for the agent to be thoroughly involved with the client and the buyer and to iron out with them any misunderstandings.

Rawson Press Release

Gareth Shepperson
Commercial and Property Attorney

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