Consumer Protection Act Compliance Checklist
For Sale and Purchase of Property — to be presented by estate agents to buyers
The Consumer Protection Act and the Sale of Property
When does the Consumer Protection Act (CPA) apply?
The CPA regulates the relationship between suppliers and consumers. A ‘supplier’ is a person who supplies goods or services in the ordinary course of business. ‘Business’ is defined by the Act as the continual marketing of any goods or services (goods include property). A supplier in the property industry includes:
- Property developers (suppliers of goods)
- Investors who buy, renovate and sell houses as a business (suppliers of goods)
- Estate agents (suppliers of services)
- Conveyancers (suppliers of services)
- Contractors such as electricians, plumbers, etc. (suppliers of services)
The Act does not apply to sale agreements between persons who do not sell their property in the ordinary course of business — for example, individuals who occasionally sell their home to buy a new one. The Act does, however, apply to estate agents, who may not make false, misleading or deceptive representations on behalf of a seller. Estate agents should protect themselves by soliciting from the seller, and presenting to the buyer, as much information as possible on each property they sell.
To protect all parties — seller, agent and buyer — in each transaction, most reputable estate agencies in South Africa ask sellers to complete and sign an immovable property condition report / checklist, as set out below.
Property Condition Report / Checklist
Status of the parties
- Is the seller selling the property in the “ordinary course of business”?
- Is there a bond registered over the property? What amount is outstanding on the bond?
- Has the seller given notice to the bondholder to cancel the bond?
- Does the seller have the original title deed (if the property is unbonded)?
- What is the seller’s marital status — single, married, divorced, or in the process of divorcing? If married, is the marriage in or out of community of property (ANC / COP)?
- What is the purchaser’s marital status — single, married, divorced, or in the process of divorcing? If married, is the marriage ANC / COP?
- Has the seller’s marital status changed since taking ownership of the property (married / divorced / widowed)?
Compliance certificates
- Is there a valid Electrical Certificate of Compliance in place (issued less than two years prior to marketing the property)?
- If yes, have any electrical changes been made to the property in the last two years? Does the seller have a certificate for that work?
- Does the property have an electric fence? If so, is there a valid Electric Fence System Compliance Certificate (issued less than two years prior to marketing the property)?
- Have any changes been made to the electric fence in the last two years? Does the seller have a certificate for that work?
- Are there any gas installations on the property? If yes, does the seller have a Gas Certificate of Compliance? If not, the seller must obtain one prior to occupation or transfer, whichever occurs first.
- Is the property within the municipal boundary of the City of Cape Town? If yes, a Plumbing Certificate of Compliance is mandatory before transfer can be registered — the Deeds Office will not register transfer without it.
- Is the property in Johannesburg or another metro where a plumbing CoC may be required by local by-law? Confirm the position with the conveyancer before listing — requirements outside Cape Town are less consistently applied.
- Is the property in a region where wood-destroying insect (beetle) infestation is a known risk — the Western Cape, KwaZulu-Natal or the Eastern Cape? If so, has a valid entomologist’s certificate been obtained?
Latent and other defects
- Is the seller aware of any leaks, water damage, damp, or cracks? Record these in detail.
- Is the seller aware of defects in the roof?
- Is the seller aware of any defects relating to the swimming pool?
- Is the seller aware of defects in heating and/or air-conditioning systems, including filters and humidifiers?
- Is the seller aware of defects in the septic system or other sanitary disposal systems?
- Is the seller aware of defects in the basement or foundations, including cracks, seepage, bulges, flooding, dampness, wet walls, unsafe mould concentrations, or defects in drain tiling or sump pumps?
- Is the seller aware of any structural defects in the property?
- Is the seller aware of any boundary disputes, encroachments or encumbrances, including a joint driveway?
- Is the seller aware that a structure on the property has been designated a historic building?
- Has the seller carried out any work on the property in the last two years? If yes, detail the work, and note whether warranties can be provided.
Zoning, title and building plans
- Is the seller aware of the property’s current zoning status, and can they prove it?
- Is the seller aware of any restrictive title conditions registered over the property? The seller undertakes to provide the buyer with a copy of the title deed on request.
- Are all structures on the property built in accordance with approved municipal building plans? The seller undertakes to supply approved plans on request, where required by council.
Tax, occupation and administrative matters
- Is the seller a non-resident for tax purposes, and is the purchase price over R2 million? (Applies to sellers as individuals or entities — triggers Section 35A withholding tax obligations for the purchaser.)
- Is there a tenant currently residing in the property? If yes, a copy of the lease agreement must be obtained and presented to the buyer.
- Is a special levy payable (if sectional title)? Note this is payable by the seller if raised before transfer, unless otherwise agreed.
- If the signatory is signing under a power of attorney, a copy must be obtained.
- If a company or close corporation is selling or buying, is the signatory authorised? Obtain a copy of the resolution, dated prior to the agreement of sale, before signing.
- If a company or close corporation is a party, confirm it remains on the register and has not been deregistered.
- Is the seller a VAT vendor? If so, is this a VATable sale forming part of the VATable enterprise? Confirm VAT versus transfer duty treatment with the conveyancer.
- If the seller or buyer is a trust, a resolution authorising the trustee to bind the trust (dated prior to the sale) is required, or alternatively all trustees must sign the agreement. Obtain the latest letters of authority to confirm validity.
- The seller confirms that all rates and taxes are up to date.
- Is there a Home Owners’ Association involved? If yes, the seller agrees to provide the buyer with all relevant details, including house rules and the code of conduct.
This checklist summarises common practice and general principles under the Consumer Protection Act, 2008 and related legislation as at the time of writing. It is not legal advice. Requirements vary by municipality and can change — have this checklist and each specific transaction reviewed by a qualified South African attorney and conveyancer before use.