Certificates of Compliance: The role of the conveyance attorney

October 7th, 2014, Published in Articles: Vector

 

lead-edIt has become apparent that many attorneys involved in the conveyance of property are either ignorant of legislative requirements or treat the issue of certificates of compliance (CoCs) with some contempt.

I say this after many years of dealing with transfer attorneys, who have cost sellers and purchasers alike many thousands of rand in litigation after the fact. In terms of legal cost and claimed damages resulting from invalid CoCs, this litigation does not benefit the seller on whose behalf the attorney acts.

Although it must be said that many of these CoCs are obtained by sellers in bona fide agreements, the gross misconduct by many registered persons in the issue of invalid CoCs holds great consequence for the property sale agreement.

In many cases, it is most unlikely that a conveyancer would be able to identify an invalid CoC purely on the merits of the issued documentation, but the issued CoC is indicative of the ultimate state of the electrical installation itself.

It does, however, immediately reflect on the conveyancer when they are advised of a potential invalid CoC before transfer has been completed, yet continue with the transfer process nonetheless.

The apparent disregard for the relevant clause in the sale agreement bears testimony to the scant regard placed by many conveyancers on the importance of this document and the validity thereof.

In most cases, the problem starts with the fact that many estate agents still use offer to purchase documentation referring to legislation which has long since been repealed and replaced.

It would, in my opinion, be the responsibility of the legal fraternity to at least ensure that this aspect is corrected. The current legislation and the Electrical Installation Regulations of 2009 in particular clearly require users to be in possession of valid CoCs, not just CoCs. Many conveyancers are also of the misguided opinion that, where a CoC is discovered to be invalid, it remains the obligation of the purchaser to pursue the registered person who signed the CoC on behalf the seller, and that neither the conveyance attorney nor the seller has any further obligation.

The seller has a contractual obligation in terms of the sale agreement to provide a valid Certificate of Compliance. There is a legal principle involved whereby the purchaser has no nexus (or link) whatsoever with the electrical contractor or registered person appointed by the seller.

In an attempt to fulfil this obligation, both seller and conveyancer forget that there is also a legal, binding contract between the seller and the electrical contractor to provide a valid CoC. Any failure on the part of the contractor to honour this agreement leaves the seller open to pursue the matter in terms of civil procedures and even the Consumer Protection Act to recover damages.

Like many other practitioners in this legal field, I hope that the legislator takes a new and serious look at this matter, sooner rather than later, and enforces compliance with the Occupational Health and Safety Act 85 of 1993. I particularly refer to contraventions made by “mandataries” in terms of Section 37.

In my view, a precedent may well be created as both estate agents and conveyancers are “mandataries” of the seller. Any contravention of the Act on the part of the seller as the “employer” may well impart liability onto such “mandataries”.

For more information, visit www.wcaeia.co.za. To comment on this article, contact vector@ee.co.za.

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