Property Practitioners' Duty to Disclose Material Facts

Full disclosure in property transactions is crucial to avoid legal consequences for both the practitioner and the seller.

July 5, 2024

According to the Property Practitioners Regulatory Authority (PPRA) of South Africa, a property practitioner is obligated to disclose all material facts concerning a property for whatever transaction to potential buyers and or lessors.While the PPRA's code of conduct does not explicitly mention "unnatural deaths," it is generally accepted that a practitioner should disclose any known significant events or circumstances that may impact the property's value or desirability.

This includes but is not limited to disclosing any deaths or tragedies that have occurred on/in and or around the property, especially if they could be considered "unnatural" (e.g., murder, suicide, accident). Failure to disclose such information could lead to legal consequences and damage to the practitioner's reputation.

2 According to the code of conduct, it is the duty of the property practitioner to ensure the protection of the interests of their clients and all other parties involved, the aim is to ensure that potential buyers or leaseholders are fully informed about the property's history, enabling them to make an informed decision. Failure to disclose such information can lead to legal consequences and damage to the estate agent's reputation.

It is important to note that the onus is on the estate agent to disclose material facts, not on the buyer or lessee to ask specific questions. The said disclosure must be made in writing, and the agent must be able to prove that the disclosure was made. The property seller or landlord is equally responsible for disclosing any known information about the property with regards to material facts of the sale or lease.

According to the Property Practitioners Act, disclosure of material facts, including any unnatural deaths or tragedies on the property, must be made in writing to the potential buyer or lessee. The property practitioner may then:

- Put the disclosure in writing, either in a separate document or as part of the sale or rental agreement or the written disclosure be made on a prescribed form, such as the "Disclosure of Material Facts" form, which is usually attached to the sale agreement or lease.

- Ensure that the disclosure is clear, concise, and easily understandable.

- Provide the written disclosure to the buyer or lessee before they enter a binding contract (e.g., sign a sale agreement or lease agreement).

- Obtain acknowledgement from the buyer or lessee that they have received and understood the disclosure.

The written disclosure requirement is crucial, as it protects both the estate agent and the seller/landlord by providing a paper trail to the disclosure, should there be a need it should be readily available, the availability of physical evidence also ensures that the buyer/lessee has clear, written evidence of the disclosure therefore helping in preventing disputes or claims of non-disclosure.

It is important to prioritise full disclosure in property transactions as failure to disclose material facts can lead to legal consequences for both the practitioner and seller.

Written by: Nqobile Magwaza
Moderated and approved by: Glenda Nell

1 Property practitioners’ regulatory authority code of conduct section 4.1.1
2 Property practitioners’ regulatory authority code of conduct section 2.2

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