191 thoughts on “Property Misrepresentation Claims in Practice”
Hi there I completed the purchase of a flat a few months ago and there has been antisocial behaviour from a group of young men since I moved in, outside and inside the building even though they aren’t residents. Apparently this has been happening for about a year now and residents have complained and filed police reports. The seller had answered no to most questions in the property information form and I understand the closest related question on disputes/complaints tend to relate to direct neighbours, not so much non-residents. Is there a claim for misrepresentation? I understand from one or two residents that the seller was aware of the issue but the reason they moved was to go back to their home country. what kind of evidence would I need to make a claim if it is possible to make one? I don’t know if the seller has made complaints apart from just having conversations with other neighbours.
Thank you for your comment. Depending on the wording on the property information form, it may be a misrepresentation for the seller to have denied the existence of, when asked, anything that they were aware of or that they could have been aware of that could have given rise to a dispute. In addition, if they answered negative when asked about whether the local authority or any other body had served any notice concerning the property or a nearby property when the opposite is true (as local authorities have statutory powers to deal with ASB) then this may be something that might constitute a misrepresentation. However without a full rundown of exactly what had happened and whether or not action was taken we would be unable to determine whether there is a claim there.
Put simply, you would need to be able to point to a false statement and then show you relied upon it and were entitled so to rely, and that as a result of same you suffered a loss. You may also have to show that you have mitigated your losses which could include yourself taking action against the persons engaging in ASB in the area or showing that you have engaged with relevant authorities.
Great article thanks. Is a seller obliged to declare a defect such as a water leak? Is there any recourse for the buyer for damages caused and repairs? Thanks
Thank you for your comment. There is no obligation on the seller to volunteer any information about the state of the property, however, any information they do disclose, such as on a Property Information Form, must be accurate. We have done a number of blog posts on misrepresentation, and also on reliance and when one can be entitled to rely upon a statement given and would suggest you start by consulting those.
We have exchanged contracts to buy a flat on a 999 year Lease, in a part renovation/part new build property….the TA8 completed by the developer stated that the property would be completed December 2021, subsequently the solicitor acting for the developer stated that completion would be February 2022…….it’s now September 2022 and we are still waiting. Unfortunately our own solicitor failed to have a long stop completion date added to the Lease Agreement. The Agreement allows that in the event that we fail to complete the purchase, we loose the deposit and risk being sued by the developer. We are tied in to an Agreement which has no effective end date……we would be prepared to walk away from our deposit but are reluctant to leave ourselves open to litigation. Is there any solution to this?
The position is a contractual one and the right to rescind the contract and walk away from the transaction (with or without your deposit) will depend on the terms of that contract. Without considering the contract in detail and the various events which have taken place, which may have had an impact on the legal position between the parties, we would merely be speculating about the position. Sometimes, variations to contracts can be agreed through further negotiations after the contract is signed, although most contracts would ordinarily try to exclude the possibility of this arising by including a clause which says there is to be no contractual variation unless this is in writing and signed by the parties. Sometimes there is also a contractual clause relating to “unreasonable” delay, entitling the seller to “cancel” the agreement in the event that this arises; this would in effect be a long-stop date.
There may be some limited scope for a misrepresentation claim against the developer if you were given factually inaccurate assurances regarding completion dates. There is some historical case law which supports the argument even if the “truth” could have been discovered by a proper review of the contract, this might not prevent a misrepresentation claim from being pursued. A primary authority on this point is Peekay Intermark v Australia and New Zealand Banking Group [2006] which is mentioned in our blog on reliance.
As for your solicitors, whether or not there is scope for a negligence claim will also depend on the contractual terms between you and the solicitor (called a “retainer”) and whether or not it can be said that the solicitor should have insisted upon a long stop date. Much would also turn on providing that had this been insisted upon, it would have been agreed to. Sometimes developers are simply not in a position to be able to provide accurate time frames. It would also need to be proved that what you were advised about the issue fell short of what a “reasonably competent conveyancing” solicitor would have advised.
Normally, expert evidence on the conduct of conveyancing solicitors and whether or not that conduct was negligent is not required in Court. However, there is case law (Brown v Gould [1996]) which does lend considerable support to the proposition that references to practitioners guides in setting out a broad baseline as to accepted conduct is admissible evidence. We are not immediately aware of any specific guidance in practitioners guides (such as the Law Society Conveyancing Handbook) which expressly states that a new build purchaser’s solicitor “must” always advise that a long stop date should be included. However, there is guidance and recommendations that a client is made aware of the situation and how it could impact on associated sale transactions, for example.
Many large developers sign up to a Consumer Code for Home Builders. This does expressly recommend that a long-stop date be included. This is arguably something that a conveyancing solicitor that is instructed to deal with off plan and new build properties should be aware of. Much would turn on the exact advice given to you about the issue.
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Hi there
I completed the purchase of a flat a few months ago and there has been antisocial behaviour from a group of young men since I moved in, outside and inside the building even though they aren’t residents. Apparently this has been happening for about a year now and residents have complained and filed police reports. The seller had answered no to most questions in the property information form and I understand the closest related question on disputes/complaints tend to relate to direct neighbours, not so much non-residents. Is there a claim for misrepresentation? I understand from one or two residents that the seller was aware of the issue but the reason they moved was to go back to their home country. what kind of evidence would I need to make a claim if it is possible to make one? I don’t know if the seller has made complaints apart from just having conversations with other neighbours.
Thank you for your comment. Depending on the wording on the property information form, it may be a misrepresentation for the seller to have denied the existence of, when asked, anything that they were aware of or that they could have been aware of that could have given rise to a dispute. In addition, if they answered negative when asked about whether the local authority or any other body had served any notice concerning the property or a nearby property when the opposite is true (as local authorities have statutory powers to deal with ASB) then this may be something that might constitute a misrepresentation. However without a full rundown of exactly what had happened and whether or not action was taken we would be unable to determine whether there is a claim there.
Put simply, you would need to be able to point to a false statement and then show you relied upon it and were entitled so to rely, and that as a result of same you suffered a loss. You may also have to show that you have mitigated your losses which could include yourself taking action against the persons engaging in ASB in the area or showing that you have engaged with relevant authorities.
Please feel free to contact our Litigation team if you wish to discuss this further.
Great article thanks.
Is a seller obliged to declare a defect such as a water leak? Is there any recourse for the buyer for damages caused and repairs?
Thanks
Thank you for your comment. There is no obligation on the seller to volunteer any information about the state of the property, however, any information they do disclose, such as on a Property Information Form, must be accurate. We have done a number of blog posts on misrepresentation, and also on reliance and when one can be entitled to rely upon a statement given and would suggest you start by consulting those.
We have exchanged contracts to buy a flat on a 999 year Lease, in a part renovation/part new build property….the TA8 completed by the developer stated that the property would be completed December 2021, subsequently the solicitor acting for the developer stated that completion would be February 2022…….it’s now September 2022 and we are still waiting. Unfortunately our own solicitor failed to have a long stop completion date added to the Lease Agreement. The Agreement allows that in the event that we fail to complete the purchase, we loose the deposit and risk being sued by the developer. We are tied in to an Agreement which has no effective end date……we would be prepared to walk away from our deposit
but are reluctant to leave ourselves open to litigation. Is there any solution to this?
Thank you for your comment.
The position is a contractual one and the right to rescind the contract and walk away from the transaction (with or without your deposit) will depend on the terms of that contract. Without considering the contract in detail and the various events which have taken place, which may have had an impact on the legal position between the parties, we would merely be speculating about the position. Sometimes, variations to contracts can be agreed through further negotiations after the contract is signed, although most contracts would ordinarily try to exclude the possibility of this arising by including a clause which says there is to be no contractual variation unless this is in writing and signed by the parties. Sometimes there is also a contractual clause relating to “unreasonable” delay, entitling the seller to “cancel” the agreement in the event that this arises; this would in effect be a long-stop date.
There may be some limited scope for a misrepresentation claim against the developer if you were given factually inaccurate assurances regarding completion dates. There is some historical case law which supports the argument even if the “truth” could have been discovered by a proper review of the contract, this might not prevent a misrepresentation claim from being pursued. A primary authority on this point is Peekay Intermark v Australia and New Zealand Banking Group [2006] which is mentioned in our blog on reliance.
As for your solicitors, whether or not there is scope for a negligence claim will also depend on the contractual terms between you and the solicitor (called a “retainer”) and whether or not it can be said that the solicitor should have insisted upon a long stop date. Much would also turn on providing that had this been insisted upon, it would have been agreed to. Sometimes developers are simply not in a position to be able to provide accurate time frames. It would also need to be proved that what you were advised about the issue fell short of what a “reasonably competent conveyancing” solicitor would have advised.
Normally, expert evidence on the conduct of conveyancing solicitors and whether or not that conduct was negligent is not required in Court. However, there is case law (Brown v Gould [1996]) which does lend considerable support to the proposition that references to practitioners guides in setting out a broad baseline as to accepted conduct is admissible evidence. We are not immediately aware of any specific guidance in practitioners guides (such as the Law Society Conveyancing Handbook) which expressly states that a new build purchaser’s solicitor “must” always advise that a long stop date should be included. However, there is guidance and recommendations that a client is made aware of the situation and how it could impact on associated sale transactions, for example.
Many large developers sign up to a Consumer Code for Home Builders. This does expressly recommend that a long-stop date be included. This is arguably something that a conveyancing solicitor that is instructed to deal with off plan and new build properties should be aware of. Much would turn on the exact advice given to you about the issue.