As climate-related events become more frequent and severe, important questions are emerging about whether sellers and estate agents should disclose environmental risks affecting a property.

Over the past decade, South Africa has experienced increasingly severe flooding, droughts, water shortages, wildfires and erosion events. These incidents have affected communities and infrastructure, but they are also beginning to influence property values, insurability and future development potential.

While South African law does not yet expressly require the disclosure of "climate risks" as a separate category, the existing legal framework may already encompass certain environmental hazards. Looking ahead, disclosure obligations could expand as climate-related risks become increasingly relevant to property transactions.

Under the mandatory disclosure regulations introduced by the Property Practitioners Act 22 of 2019, a property practitioner may not accept a mandate unless the seller has completed and signed the prescribed mandatory disclosure form. The completed form must be provided to prospective purchasers and attached to the sale agreement. Failure to comply may expose the practitioner to liability.

The prescribed disclosure form requires sellers to disclose known defects and conditions that may materially affect the property. A "defect" is broadly defined as any condition, whether latent or patent, that would or could have a significant adverse impact on, or affect, the value of the property, that would or could significantly impair or impact upon the health or safety of any future occupants of the property or that, if not repaired, removed or replaced, would or could significantly shorten or adversely affect the expected normal lifespan of the property.

Although the disclosure form was primarily designed to address traditional property defects such as structural issues, damp, leaks and non-compliant improvements, its broad wording raises an important question: could recurring flooding, coastal erosion, wildfire vulnerability or chronic water supply problems constitute conditions that materially affect a property's value or usability? In many cases, the answer may well be yes.

South African law has long recognised the distinction between patent defects, which are visible upon inspection, and latent defects, which are not reasonably discoverable through ordinary inspection. A seller who knowingly conceals a latent defect may face legal consequences despite the existence of a voetstoots clause. Similarly, estate agents are required to disclose material facts that are within their knowledge, or that ought reasonably to be within their knowledge.

This principle becomes particularly relevant when considering climate-related risks.

Examples may include:

• A property that has repeatedly flooded during periods of heavy rainfall.
• A coastal property experiencing ongoing erosion.
• A home situated in a known wildfire-prone area where previous fires have threatened structures.
• A property that regularly experiences water shortages because of declining municipal supply or groundwater depletion.
• Land that is subject to instability, subsidence or wash-away risks following extreme weather events.

Where such circumstances are known to the seller and materially affect the property's use, value, safety or future maintenance costs, a court may regard them as facts that ought to be disclosed to prospective purchasers.

It is important to note that estate agents are not environmental consultants, engineers or climate scientists. A recent case has confirmed that property practitioners generally have no obligation to conduct technical investigations to uncover hidden defects. Their duty is primarily to disclose material facts that are within their knowledge or that ought reasonably to be within their knowledge.

However, this does not mean practitioners can ignore obvious warning signs. If an estate agent is aware that a property has flooded repeatedly, sustained wildfire damage, or is subject to municipal restrictions arising from environmental concerns, those circumstances may constitute material facts requiring disclosure.

As climate risks become more widely documented and publicly accessible, the standard of what a property practitioner ought reasonably to know may also evolve.

Internationally, climate-risk disclosure requirements are becoming increasingly common. In many jurisdictions, purchasers now expect information regarding flood plans, wildfire exposure, coastal erosion, insurance availability and climate resilience measures before committing to a purchase. Financial institutions, insurers and investors are also paying closer attention to climate-related risks.

Properties exposed to significant environmental hazards may face:

• Increased insurance premiums;
• Reduced availability of insurance cover;
• More cautious lending practices from financial institutions;
• Lower market values; and
• Higher maintenance and adaptation costs.

As these issues become more financially significant, pressure for greater transparency during property transactions is likely to increase.

Could South African law Evolve?
Given broader developments in the legal and regulatory landscape, the answer is almost certainly yes. Possible future measures could include:

1. Enhanced disclosure forms
The mandatory disclosure form could be amended to require sellers to disclose known environmental hazards, previous flood damage, wildfire incidents and erosion concerns.

2. Municipal risk mapping
Municipalities may increasingly publish flood-line, erosion and fire-risk data, making this information more readily accessible to purchasers and property practitioners.

3. Insurance-based disclosure
Insurers may require disclosure of prior climate-related claims, indirectly creating additional disclosure obligations during property transactions.

4. Expanded consumer protection expectations
Courts may increasingly regard known climate-related hazards as material facts that influence a purchaser's decision, particularly where those risks affect habitability, safety or long-term value.

Looking ahead
Climate change is already transforming how property is valued, insured and developed. Although South African property law has not yet created a specific duty to disclose climate-related risks, the principles underpinning defect disclosure and the disclosure of material facts are already pointing in that direction.

The question may no longer be whether climate-related risks should be disclosed, but rather how extensive those disclosure obligations will become in the years ahead.

For sellers, property practitioners and purchasers alike, transparency remains the safest approach. As environmental risks become increasingly significant to property ownership, disclosure may become not only a legal expectation but also a commercial necessity.


Disclaimer: This article is the personal opinion/view of the author(s) and does not necessarily present the views of the firm. The content is provided for information only and should not be seen as an exact or complete exposition of the law. Accordingly, no reliance should be placed on the content for any reason whatsoever, and no action should be taken on the basis thereof unless its application and accuracy have been confirmed by a legal advisor. The firm and author(s) cannot be held liable for any prejudice or damage resulting from action taken based on this content without further written confirmation by the author(s).