The Sales Agreement Needs To Make Provision For Lack Of Maintenance Due To Water Restrictions
Category Legal Information
A water related and practical issue which has of late become quite a frequent occurrence during the sales / transfer process of a properties in the Western Cape is a disappointed buyer who bought a house with a pretty, well-established garden and a sparkling blue and full swimming pool, only to be confronted on transfer with the ugly reality of the drought gripping Cape Town. The garden is dead or dying and the swimming pool is a half-filled brown swamp!
According to Andrew Murray from Miltons Matsemela Attorneys the buyer is generally, in our property law, entitled to receive in the same condition, that which he purchased on date of sale. Delivery cannot be instant with immoveable property due to the transfer process and there is often a period of several months between date of sale and date of transfer, when delivery of ownership passes to the buyer. Accordingly, the seller remains responsible for the maintenance of the property unless the risk of ownership has passed, eg on occupation.
When delivery is not possible
Unforeseen events are called “Acts of God” in every day and insurance language. Our law has developed a system of rules dealing with what we call vis maior or supervening circumstances which make performance of a contract impossible. It is very difficult for parties contracting with each other to foresee any and every happening, whether due to natural causes or human or legislative agency, and contract accordingly. This system of rules prevent a buyer from demanding delivery, when delivery is simply not possible, when the parties have not foreseen the problem in their contract.
So, back to the examples above of the dead garden or dirty swimming pool. If a seller client is confronted by an angry buyer who will not take transfer of a property or who wishes the damage to a garden or swimming pool to be made good, my advice to them would be that there has been a partial form of supervening impossibility of performance. In our case, the City of Cape Town has prohibited the watering of gardens as well as the filling of swimming pools.
Legislation is one example of supervening impossibility of performance in our law. The same argument must apply to a tenant who is required in terms of his lease, to maintain the garden and pool, and is similarly prohibited from doing so. Logic also provides that the buyer would have been in the same position had he bought earlier in the year, and would be subject to the same water restrictions now.
Write the drought effects into the contract
A possible counter-argument that because people are purchasing bulk water, such a seller should have taken the effort to buy water and maintain the garden or fill the pool and restore it to its original pristine state before transfer is according to Murray not valid. Technically, the National Water Act, 1998, provides that water is a natural resource that belongs to everyone, and water cannot be sold without compliance with the Act. Anyone selling water without a licence is breaking the law and this would not be lawful or ethical in the circumstances.
According to Murray, a practical solution to estate agents and clients entering into Deeds of Sale would be to make a reference to the ongoing drought in the Western Cape and disclose (especially to non-Capetonians) that it will not be possible to maintain a garden or a swimming pool due to the legislative constraints.
Here is an example of such a clause:
“The purchaser acknowledges and accepts that (notwithstanding the seller’s duty to maintain the property in the same condition as when the offer was accepted, pending the passing of risk), due to water restrictions imposed by the municipal authority, the swimming pool; garden and all water dependent features (if any) will on date of registration of transfer, not necessarily be in the same condition as when purchased and hereby waives any claims against the seller in this regard for as long as these restrictions apply”.
According to Murray, estate agents should also warn prospective foreign and out-of-town buyers, and record in the deed of sale or disclosure document, that the City of Cape Town may also have to shut down our water supply entirely in April or May 2018.
Author: Miltons Matsemela Inc. Attorneys - AJ Murray