Although CCMA rules generally allow you to have legal representation in arbitrations, there is one important – and common – exception.
A recent Supreme Court of Appeal decision highlights the dangers of relying on anything said in the course of a "sales pitch" when buying a property.
Firstly, the facts: -
- The developer of a multi-story sectional title development instructed agents to sell the (as yet unbuilt) luxury apartments on an off-plan basis.
- The purchaser of a 4th floor apartment had been told by the agents that it would enjoy unobstructed sea views.
- This impression was confirmed in a promotional CD-ROM supplied by the seller.
- To the purchaser's dismay, the same developer then commenced construction of an adjacent 5-story development which significantly impinged on the view.
- The purchaser sued the seller for damages for "fraudulent misrepresentation or non-disclosure".
On appeal the buyers' claim was dismissed, the SCA holding that "the agents were not party to an actionable misrepresentation" and had "probably expressed themselves in terms which conveyed no more than their opinion of the future state of the view".
To be "actionable" in our law, a representation "must relate to an ascertainable fact as distinct from a mere expression of opinion………what is decisive is a holistic view of the terms of the representation and the context in which it was made."
Buyers: That's a fine distinction there, and fine distinctions make for expensive litigation. The new Consumer Protection Act (CPA) will bolster a purchaser's rights in this sort of case, but still the best way to avoid uncertainty and dispute is to insist on recording - in specific terms - anything said that is material to your decision to buy.
Sellers and agents: Make sure that all "sales pitches", marketing and negotiating statements are accurate and recorded - where the CPA applies, "false, misleading or deceptive representations" (which are widely defined) are specifically prohibited.