Unfortunately, with the information that you have provided it is not possible to say with any certainty whether or not there is a claim for misrepresentation. However, if the auction pack described the property in a particular way, and that was not the case, then there may very well be a claim for misrepresentation.
Having said this, the issue is likely to turn not on proving that a misrepresentation has occurred, but what loss you may have suffered. We are hesitant to suggest that the description of a particular property or the use of a room as a bedroom, study, living room etc would necessarily have any impact on the value of the property. The position may be different if the property was described in a way which indicated how many rooms there were and it transpires the property is actually considerably smaller or has less rooms than suggested. However, subject to a few minor exceptions, we would be hesitant to suggest that a description of what a particular room in a property is being used for at that point in time could form the basis of a misrepresentation claim.
I have recently completed a purchase on a property. Problem is it is non standard construction and this wasn’t disclosed in the legal pack. What should I do?
I was only made aware of this by an estate agent who came to value the property.
It is unlikely that there is a claim here. The construction of the property is not generally something that a seller would normally be providing information about, even in a non-auction transaction. This makes sense, as the method of construction and structural issues are unlikely to be something that the seller can explain with any authority, as they are not generally surveyors or structural engineers. Normally, a buyer will undertake their own survey which will reveal any issues. It would also be usual for a person purchasing a property with the assistance of a mortgage for their lender to insist on a survey being undertaken, to ensure that the property is in a condition and of a construction that its financial value is sufficient that the mortgage secured against it can be repaid from the equity.
At auction, the principle is the same, however, a purchaser may not be given the opportunity to have a survey undertaken or raise enquiries with the seller. A property being sold at auction is often “sold as seen”, insofar as it would be for any potential bidder to ensure that they have all the information about the property they want in order to proceed. If some of that information is missing, it is normally up to the bidder to decide whether or not they want to accept the risk. If purchasing with the assistance of a mortgage, the bidder would be well advised to ensure that there will be no issues with financing the transaction before any bids are placed, as once the hammer falls, the bidder is contractually obliged to complete the transaction or lose their deposit.
Unless something specific about the construction of the property was said and this was misleading, it would be a very rare case where there would be a claim for misrepresentation on the basis of something which was not specifically referred to in the auction pack. Put another way, unless the purchaser has been misled in some way (as opposed to the auction pack merely being silent on the point) then there is unlikely to be a misrepresentation claim.
I exchanged two properties in Nov 2020 with the intention to complete in Jan 2021
-There were discrepancies with the legal pack and tenancies which were brought to the attention after the exchange just before completion by my conveyancer . The auction pack included inter alia Assured Shorthold Tenancy Agreements (the ‘ASTs’) which the Properties were being sold subject to the rent was paid monthly in advance; and that deposits had been taken and protected pursuant to The Housing Act 2004. The Misrepresentation – After contracts had exchanged it came to light that, contrary to the information provided, the rent was in fact paid in arrears and the defendant averred that deposits had not in fact been taken or protected. Given the reliance placed on the AST’s and the potential liability in the event that there was, in fact, a deposit that had been registered in accordance with the AST, my solicitors asked for assurances to be made in terms of the deposit and for apportionments to be made on the completion sums for any outstanding rent. Despite the assurances and further information sought, the vendor failed to provide evidence of the rent being paid or any assurance in respect of the Deposit said to have been paid in the AST’s but allegedly not taken.
-The seller ignored all our correspondence on this matter and their conveyancer served notice to complete.
-auctioneer didn’t want to get involved citing it was a legal matter.
-My solicitor served legal notices on the seller & advised me not to complete due to the misrepresentation as if I have completed, I won’t be able to claim damages/breech of contract
-In the meantime, vendor’s solicitor refrained from responding to any of my solicitor’s correspondence but unilaterally decided to forfeit the deposit.
-hence, as it’s stands, I stand to lose the 10% deposit, auctioneer fees plus Legals & cost on planning etc worth £28k
-so as it stands, this matter will be settled in the courts
I haven’t done anything wrong and followed legal advice and the law of the country but may still end up losing money if I lose the legal battle
Would like to get your opinion, in hindsight whether it would have been sensible just to avoid this stress and hassle and just gone ahead and completed knowingly I have been misrepresented (as the completion funds were my solicitor on the completion date) and then face the issues with the deposit, sitting tenants and rent arrears, payments etc after the completion
We have dealt with cases where an underlying agreement between the landlord and tenant was not disclosed and the auction pack clearly provided that the terms of the agreement between the landlord and tenant were as per the terms of the lease. However, this case is based on actual representations made. In your particular matter, it is not clear whether or not you were expressly told that there were “no problems with the tenants” or that the agreement with the tenants was exactly as set out in the tenancy agreements provided. It is also unclear whether or not all of the necessary formalities in relation to the assured shorthold tenancies were expressly said (or at the very least implicitly suggested) to have been complied with.
We would always recommend that a person considering bidding on a property at auction should first run the auction pack and relevant information pack past their own solicitor. Whilst there is obviously a cost involved with this, the purpose of that instruction of course is to minimise the risk of bidding on a property with more significant issues which would incur a greater cost or loss to the bidder.
From what you have written, it sounds as though your solicitors were protecting your position, but this may have been too late insofar as their instruction appears to have probably been given to them after your successful bid was placed.
There is little point providing advice with hindsight. Whether or not a solicitor has been negligent is an issue that is determined based on what a reasonably competent solicitor would have done at the time and faced with the information provided. However, your solicitors should have set out your options for you to enable you to make an informed decision as to whether or not to proceed with the purchase or to forfeit the deposit.
Unfortunately, without considering the documentation in much more detail we cannot really add much more to the position than we do above. If you would like to explore the matter in more detail, please do feel free to get in touch.
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I was the winning bidder on a property that was advertised as 3 bedrooms. It only has 2 bedrooms. Do i have a case for misrepresentation?
Unfortunately, with the information that you have provided it is not possible to say with any certainty whether or not there is a claim for misrepresentation. However, if the auction pack described the property in a particular way, and that was not the case, then there may very well be a claim for misrepresentation.
Having said this, the issue is likely to turn not on proving that a misrepresentation has occurred, but what loss you may have suffered. We are hesitant to suggest that the description of a particular property or the use of a room as a bedroom, study, living room etc would necessarily have any impact on the value of the property. The position may be different if the property was described in a way which indicated how many rooms there were and it transpires the property is actually considerably smaller or has less rooms than suggested. However, subject to a few minor exceptions, we would be hesitant to suggest that a description of what a particular room in a property is being used for at that point in time could form the basis of a misrepresentation claim.
Hi there,
I have recently completed a purchase on a property. Problem is it is non standard construction and this wasn’t disclosed in the legal pack. What should I do?
I was only made aware of this by an estate agent who came to value the property.
Is there a way to claim/sue auction or seller?
Thank you for your comment.
It is unlikely that there is a claim here. The construction of the property is not generally something that a seller would normally be providing information about, even in a non-auction transaction. This makes sense, as the method of construction and structural issues are unlikely to be something that the seller can explain with any authority, as they are not generally surveyors or structural engineers. Normally, a buyer will undertake their own survey which will reveal any issues. It would also be usual for a person purchasing a property with the assistance of a mortgage for their lender to insist on a survey being undertaken, to ensure that the property is in a condition and of a construction that its financial value is sufficient that the mortgage secured against it can be repaid from the equity.
At auction, the principle is the same, however, a purchaser may not be given the opportunity to have a survey undertaken or raise enquiries with the seller. A property being sold at auction is often “sold as seen”, insofar as it would be for any potential bidder to ensure that they have all the information about the property they want in order to proceed. If some of that information is missing, it is normally up to the bidder to decide whether or not they want to accept the risk. If purchasing with the assistance of a mortgage, the bidder would be well advised to ensure that there will be no issues with financing the transaction before any bids are placed, as once the hammer falls, the bidder is contractually obliged to complete the transaction or lose their deposit.
Unless something specific about the construction of the property was said and this was misleading, it would be a very rare case where there would be a claim for misrepresentation on the basis of something which was not specifically referred to in the auction pack. Put another way, unless the purchaser has been misled in some way (as opposed to the auction pack merely being silent on the point) then there is unlikely to be a misrepresentation claim.
-Dear Sir/Madam
I exchanged two properties in Nov 2020 with the intention to complete in Jan 2021
-There were discrepancies with the legal pack and tenancies which were brought to the attention after the exchange just before completion by my conveyancer . The auction pack included inter alia Assured Shorthold Tenancy Agreements (the ‘ASTs’) which the Properties were being sold subject to the rent was paid monthly in advance; and that deposits had been taken and protected pursuant to The Housing Act 2004.
The Misrepresentation – After contracts had exchanged it came to light that, contrary to the information provided, the rent was in fact paid in arrears and the defendant averred that deposits had not in fact been taken or protected. Given the reliance placed on the AST’s and the potential liability in the event that there was, in fact, a deposit that had been registered in accordance with the AST, my solicitors asked for assurances to be made in terms of the deposit and for apportionments to be made on the completion sums for any outstanding rent. Despite the assurances and further information sought, the vendor failed to provide evidence of the rent being paid or any assurance in respect of the Deposit said to have been paid in the AST’s but allegedly not taken.
-The seller ignored all our correspondence on this matter and their conveyancer served notice to complete.
-auctioneer didn’t want to get involved citing it was a legal matter.
-My solicitor served legal notices on the seller & advised me not to complete due to the misrepresentation as if I have completed, I won’t be able to claim damages/breech of contract
-In the meantime, vendor’s solicitor refrained from responding to any of my solicitor’s correspondence but unilaterally decided to forfeit the deposit.
-hence, as it’s stands, I stand to lose the 10% deposit, auctioneer fees plus Legals & cost on planning etc worth £28k
-so as it stands, this matter will be settled in the courts
I haven’t done anything wrong and followed legal advice and the law of the country but may still end up losing money if I lose the legal battle
Would like to get your opinion, in hindsight whether it would have been sensible just to avoid this stress and hassle and just gone ahead and completed knowingly I have been misrepresented (as the completion funds were my solicitor on the completion date) and then face the issues with the deposit, sitting tenants and rent arrears, payments etc after the completion
Thank you for your comment.
We have dealt with cases where an underlying agreement between the landlord and tenant was not disclosed and the auction pack clearly provided that the terms of the agreement between the landlord and tenant were as per the terms of the lease. However, this case is based on actual representations made. In your particular matter, it is not clear whether or not you were expressly told that there were “no problems with the tenants” or that the agreement with the tenants was exactly as set out in the tenancy agreements provided. It is also unclear whether or not all of the necessary formalities in relation to the assured shorthold tenancies were expressly said (or at the very least implicitly suggested) to have been complied with.
We would always recommend that a person considering bidding on a property at auction should first run the auction pack and relevant information pack past their own solicitor. Whilst there is obviously a cost involved with this, the purpose of that instruction of course is to minimise the risk of bidding on a property with more significant issues which would incur a greater cost or loss to the bidder.
From what you have written, it sounds as though your solicitors were protecting your position, but this may have been too late insofar as their instruction appears to have probably been given to them after your successful bid was placed.
There is little point providing advice with hindsight. Whether or not a solicitor has been negligent is an issue that is determined based on what a reasonably competent solicitor would have done at the time and faced with the information provided. However, your solicitors should have set out your options for you to enable you to make an informed decision as to whether or not to proceed with the purchase or to forfeit the deposit.
Unfortunately, without considering the documentation in much more detail we cannot really add much more to the position than we do above. If you would like to explore the matter in more detail, please do feel free to get in touch.