The new Consumer Protection Act includes a five day cooling-off period that allows any buyer to effectively cancel an offer to purchase as long as this is done within five days of the offer being submitted and accepted.

According to Lanice Steward, managing director Anne Porter Knight Frank, the implications are much wider than just cancelling a sale. She says that any estate agent who gets a sole mandate from a seller must realise that the seller can cancel that sole mandate as long as he or she does so within five working days of signing it.

“There is an important proviso though. This ruling only applies if the sole mandate to sell the property came about as a result of a direct marketing campaign.

“In practice this means that if a client responds to a letter, a fax or an e-mail then it is deemed as direct marketing and the sole mandate agreement can be cancelled within five working days,” says Steward.

She says that in terms of the Act the agent must explain all the implications of a sole mandate and must inform the seller of their right to cancel the mandate within five working days.

Steward says that the CPA will result in the relationship between the client and the estate agent becoming that much more structured and formal.

“All communications and all agreements will have to be unambiguous and any clauses that may seem difficult to understand must be simplified. If Latin terms are used these must be translated into simple English.

Steward says that a sales mandate – whether sole or open – is a fundamental part of the sales process and this mandate should contain a comprehensive list of all the characteristics of the home, including its flaws.

Steward says that it’s important for the seller and agent not to ignore aspects such as damp patches or stains because in terms of the new Act, any material defects that are not disclosed could result in cancellation of the sale or even damages being claimed to repair the faults.

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Johannesburg – Prospective homeowners who wish to take the risk of buying a property off-plan should wait until October 24.

That is when the widely debated Consumer Protection Act comes into force, introducing an era of improved protection of South African consumer rights.

The bill is a comprehensive revision of all existing legislation related to consumer rights, which also affects property developers.

Schalk van der Merwe, a property attorney at VFV Mseleku, said the act will offer consumers buying off-plan far greater protection. It will significantly lessen the risks buyers face from the development industry, but at the same time increase the risk for developers.

He says the legislation will impose much greater responsibility on developers to look after buyers, from the point of marketing a property to ensuring that the buyer is entirely satisfied with the end product.

The reason for this is that the buyer does not have an opportunity to check what he is buying at the time of signing the contract.

If, on completion, the product delivered to the buyer deviates from what is described in the contract or advertising material, the buyer can cancel the contract and return the “goods” at the developer’s expense.

Deceptive marketing material, such as stating that the property is five minutes away from schools or that it is suited to some purpose for which it has not been zoned, can give the buyer the right to return the property.

The courts will now also have the power to interpret the contract between the parties more widely, also with reference to the parties’ conduct when concluding the contract, and can declare a contract null and void if the actions of the seller or his agent were unfair or unlawful.

The consumer is further protected by a brand new “cooling off” rule when the property is sold by means of direct marketing. This rule has a much wider reach than the existing right to a cooling-off period, which only applies to the sale of properties worth less than R250 000.

The developer will also be held responsible for any defects that arise afterwards. Van der Merwe said this could lead to serious litigation, but is a huge step forward for the man in the street.

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