191 thoughts on “Property Misrepresentation Claims in Practice”
We are in the process of buying a new build. The sellers sales consultant to us on more than one occasion the boundary is where the metal fence is and the wooden posts are in place. The metal retaining fence would be replaced with wooden fencing. The plot is advertised as large, stunning generous corner plot. We went to site yesterday the rear garden fence has be erected 3 meters into the garden away from the original metal fencing reducing the depth along the complete bottom of the garden by 3 meters. Furthermore, they have erected a fence across the back of the garden for the edge of the side bungalow to the rear fence effectively reducing the rear garden even further, separating the right hand side of the property from the rear garden and totally exposing the bungalow to the public, which makes it appear to not belong within the boundary of the plot. We wasn’t told this would be open plan and not form part of the rear garden, whereby it also exposes the rear lounge window greater than the front one, which we envisaged was hidden fro view by a boundary 6’ fence and enclosed within our boundary of the plot. I don’t want to buy it now my problem is, we did an exchange with the builder and he is likely to insist we pay the 5% of our exchange property to him, can we get out of this without this penalty if we pull out due to their misrepresentation, the garden is not large it’s less than expected, in both width, length and made the bungalow to vunable for older people to live there. It’s four bedrooms but no way a family sized rear garden.
If you have exchanged contracts but not yet completed, then it will be necessary to consider the terms of the contract carefully.
Often a developer’s contract enables the developer to deviate from the design to some degree, provided that it is does not have a material impact on the value of the property.
What remedies you have would also likely depend on the terms of the contract. For example, if the Law Society’s standard conditions of sale are incorporated into the contract (which they usually would be) then clause 7 of them could be relevant. We are thinking of a situation where a plan was attached to the contract or provided to you which now materially differs from what you are purchasing. Whether or not damages or rescission of the contract is available would normally depend on whether or not the error in the plan was “reckless”.
We bought a property in London in December 2022. In answer to 7.1 on TA6 the sellers stated the property (including the garden) had never flooded by ticking ‘no’.
When we registered with Thames Water we were immediately notified by them that the water meter was recording 45 litres as a minimum every hour and that a leak was likely. On contacting TW they stated they had put a leak notification on the account on 24th July 2022, 6 months before completion (and three months before we put an offer on the property). We contacted the plumber who had previously been recommended by the vendors for internal work who stated he didn’t do external work, but that he remembered that there had been a leaking pipe, and that water had been coming up in the front garden.
We have contacted the vendors’ solicitors to ask about the leak, when it was fixed and why it wasn’t notified on TA6. They replied to say there had been a leak, which came up in the front garden in March 2022, which their insurers repaired, but they went for a spot fix, which can lead to other leaks in a failing pipe, rather than having it replaced as advised by their insurer’s plumber. They have sent all the correspondence from the insurer’s appointed plumbers on this point and have also stated:
“I’ve forwarded you emails about leak last March that we had repaired through our insurance company. “We were advised to replace the pipe but never did as thought we would do it if the leak happened again. “The leak happened right on the front boundary of the property just behind the gate. “We were never informed about subsequent leak alert from Thames Water in July and have been disputing our recent closing bill with them for this reason. “Re the property information form. I just reread and it asks nothing about leaks specifically but I must have completely forgotten to state that we claimed fixing the leak on insurance as to be honest, I couldn’t remember that we did this until now.”
Our conveyancer has said that this is clear misrepresentation, but that she’s not in a position to act further on this point. Our insurer says that external pipes are only covered under accidental damage, which we don’t have – but as an undisclosed, existing fault with the property, surely the vendors should have to now cover the cost of repair and reinstatement?
This is a little too specific for us to answer. We can only provide general guidance and not specific legal advice. One of the reasons for this is we would need to consider the whole of the position and all of the documentation involved before we could form a view on whether or not there was a misrepresentation.
What is or is not a “flood” is a subjective question. There is no legal definition of this applicable to misrepresentation claims. To some, standing water which does not drain quickly in a garden could be waterlogging, to others, a flood (an argument raised in one matter we were instructed on). The situation is similar to when neighbour disputes exists. To some sellers, it might be considered a minor altercation, to others, an ongoing dispute.
The case of McMeekin v Long [2003] (referred to Property Misrepresentation Claims: Example Cases and Advice) is a good example of the approach the Courts will take. Broadly, it will consider the facts of the case and information was intended to be conveyed from the property information form without imposing any special or legal knowledge on the parties.
Subject to other aspects of the matter, such as the contractual position between the parties, your query is effectively whether or not a leak in March 2022 would be understood by an average seller and buyer to be a “flood”. This would be determined by the factual circumstances and evidence and fundamentally, whether or not a judge would consider this to be the case. There is unlikely to be any case law that is relevant to your specific circumstances, beyond that which sets out the approach that the Court will take to making that decision.
It is also necessary to think about the practical side of things. What loss have you suffered? Is the spot fix working and to what extent would this have had an impact on the value of the property had the point been made known to you at the time? Whilst we would require input from a surveyor on diminution in value, the normal measure of damages in a matter like this, we are not sure that such an issue would have a huge impact on the value of the property, making the cost effectiveness of incurring legal costs questionable.
I purchased a property back in. December 2017 for 1.2 million ,the seller advertised the property with an attache annex/cottage that could be rented out for £350-£600 per week ,this was advertised with 7 different estate agent with the same wording, when I moved in I received a letter from the N.P that they were concerned the way the property was marketed and if I were to rent out the cottage the N.P would apply enforcement action to cease the action of renting out, the vendor lied on 7 points on the TA6 form regarding the rental of the annex he had knowledge from the N.P that this would not be able to be rented out . I have until the end of December 2023 to bring a case I have legal expenses insurance also . had I been made aware that I could rent out the annex I would not have proceed with the purchase .
Firstly, we are a little unsure who the NP are. We assume that this is the local authority or some other authority that has the right to prevent you from renting out your property for whatever reason.
On the assumption that this is the case, the question turns on whether or not what the seller said to you could be considered a “statement of fact”.
A misrepresentation claim will only arise if a seller makes a false statement of “fact”. A statement of “opinion” i.e. that the seller’s opinion was that the annexe could be rented out, is not the same as saying it definitely could be. Likewise, it is arguable whether or not this is a statement of “law”. Generally, statements about the legal position of something are not actionable either, however, there is case law that blurs this distinction.
In short, if it was categorically said to you, or could reasonably be implied from the statement the seller made that the annexe could be rented without the “NP” taking enforcement action, there may be a claim. If you merely assumed that you were able to legally rent the annexe out, there is a good chance that there may not be a claim.
The point you make regarding the seller having actual knowledge that it was not legally possible to rent out the annexe is interesting. If it can be said that the seller effectively stated that it was legally possible to rent out the annex when they had actual knowledge that this was not the case, then there could be a basis of claim in fraudulent misrepresentation.
As for your legal expenses insurance, this is complicated. We can work pursuant to that contract of insurance, but it is important to consider the terms of the policy; insurers like to appoint their panel solicitors and normally they provide the insurer with preferential charging rates.
We would need to consider the statements made and full facts of the matter before we could form a view on whether or not there is any sort of claim.
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We are in the process of buying a new build. The sellers sales consultant to us on more than one occasion the boundary is where the metal fence is and the wooden posts are in place. The metal retaining fence would be replaced with wooden fencing. The plot is advertised as large, stunning generous corner plot.
We went to site yesterday the rear garden fence has be erected 3 meters into the garden away from the original metal fencing reducing the depth along the complete bottom of the garden by 3 meters. Furthermore, they have erected a fence across the back of the garden for the edge of the side bungalow to the rear fence effectively reducing the rear garden even further, separating the right hand side of the property from the rear garden and totally exposing the bungalow to the public, which makes it appear to not belong within the boundary of the plot. We wasn’t told this would be open plan and not form part of the rear garden, whereby it also exposes the rear lounge window greater than the front one, which we envisaged was hidden fro view by a boundary 6’ fence and enclosed within our boundary of the plot. I don’t want to buy it now my problem is, we did an exchange with the builder and he is likely to insist we pay the 5% of our exchange property to him, can we get out of this without this penalty if we pull out due to their misrepresentation, the garden is not large it’s less than expected, in both width, length and made the bungalow to vunable for older people to live there. It’s four bedrooms but no way a family sized rear garden.
Thank you for your comment.
If you have exchanged contracts but not yet completed, then it will be necessary to consider the terms of the contract carefully.
Often a developer’s contract enables the developer to deviate from the design to some degree, provided that it is does not have a material impact on the value of the property.
What remedies you have would also likely depend on the terms of the contract. For example, if the Law Society’s standard conditions of sale are incorporated into the contract (which they usually would be) then clause 7 of them could be relevant. We are thinking of a situation where a plan was attached to the contract or provided to you which now materially differs from what you are purchasing. Whether or not damages or rescission of the contract is available would normally depend on whether or not the error in the plan was “reckless”.
We bought a property in London in December 2022. In answer to 7.1 on TA6 the sellers stated the property (including the garden) had never flooded by ticking ‘no’.
When we registered with Thames Water we were immediately notified by them that the water meter was recording 45 litres as a minimum every hour and that a leak was likely. On contacting TW they stated they had put a leak notification on the account on 24th July 2022, 6 months before completion (and three months before we put an offer on the property). We contacted the plumber who had previously been recommended by the vendors for internal work who stated he didn’t do external work, but that he remembered that there had been a leaking pipe, and that water had been coming up in the front garden.
We have contacted the vendors’ solicitors to ask about the leak, when it was fixed and why it wasn’t notified on TA6. They replied to say there had been a leak, which came up in the front garden in March 2022, which their insurers repaired, but they went for a spot fix, which can lead to other leaks in a failing pipe, rather than having it replaced as advised by their insurer’s plumber. They have sent all the correspondence from the insurer’s appointed plumbers on this point and have also stated:
“I’ve forwarded you emails about leak last March that we had repaired through our insurance company.
“We were advised to replace the pipe but never did as thought we would do it if the leak happened again.
“The leak happened right on the front boundary of the property just behind the gate.
“We were never informed about subsequent leak alert from Thames Water in July and have been disputing our recent closing bill with them for this reason.
“Re the property information form. I just reread and it asks nothing about leaks specifically but I must have completely forgotten to state that we claimed fixing the leak on insurance as to be honest, I couldn’t remember that we did this until now.”
Our conveyancer has said that this is clear misrepresentation, but that she’s not in a position to act further on this point. Our insurer says that external pipes are only covered under accidental damage, which we don’t have – but as an undisclosed, existing fault with the property, surely the vendors should have to now cover the cost of repair and reinstatement?
Thank you for your comment.
This is a little too specific for us to answer. We can only provide general guidance and not specific legal advice. One of the reasons for this is we would need to consider the whole of the position and all of the documentation involved before we could form a view on whether or not there was a misrepresentation.
What is or is not a “flood” is a subjective question. There is no legal definition of this applicable to misrepresentation claims. To some, standing water which does not drain quickly in a garden could be waterlogging, to others, a flood (an argument raised in one matter we were instructed on). The situation is similar to when neighbour disputes exists. To some sellers, it might be considered a minor altercation, to others, an ongoing dispute.
The case of McMeekin v Long [2003] (referred to Property Misrepresentation Claims: Example Cases and Advice) is a good example of the approach the Courts will take. Broadly, it will consider the facts of the case and information was intended to be conveyed from the property information form without imposing any special or legal knowledge on the parties.
Subject to other aspects of the matter, such as the contractual position between the parties, your query is effectively whether or not a leak in March 2022 would be understood by an average seller and buyer to be a “flood”. This would be determined by the factual circumstances and evidence and fundamentally, whether or not a judge would consider this to be the case. There is unlikely to be any case law that is relevant to your specific circumstances, beyond that which sets out the approach that the Court will take to making that decision.
It is also necessary to think about the practical side of things. What loss have you suffered? Is the spot fix working and to what extent would this have had an impact on the value of the property had the point been made known to you at the time? Whilst we would require input from a surveyor on diminution in value, the normal measure of damages in a matter like this, we are not sure that such an issue would have a huge impact on the value of the property, making the cost effectiveness of incurring legal costs questionable.
I purchased a property back in. December 2017 for 1.2 million ,the seller advertised the property with an attache annex/cottage that could be rented out for £350-£600 per week ,this was advertised with 7 different estate agent with the same wording, when I moved in I received a letter from the N.P that they were concerned the way the property was marketed and if I were to rent out the cottage the N.P would apply enforcement action to cease the action of renting out, the vendor lied on 7 points on the TA6 form regarding the rental of the annex he had knowledge from the N.P that this would not be able to be rented out .
I have until the end of December 2023 to bring a case I have legal expenses insurance also .
had I been made aware that I could rent out the annex I would not have proceed with the purchase .
Thank you for your comment.
Firstly, we are a little unsure who the NP are. We assume that this is the local authority or some other authority that has the right to prevent you from renting out your property for whatever reason.
On the assumption that this is the case, the question turns on whether or not what the seller said to you could be considered a “statement of fact”.
A misrepresentation claim will only arise if a seller makes a false statement of “fact”. A statement of “opinion” i.e. that the seller’s opinion was that the annexe could be rented out, is not the same as saying it definitely could be. Likewise, it is arguable whether or not this is a statement of “law”. Generally, statements about the legal position of something are not actionable either, however, there is case law that blurs this distinction.
In short, if it was categorically said to you, or could reasonably be implied from the statement the seller made that the annexe could be rented without the “NP” taking enforcement action, there may be a claim. If you merely assumed that you were able to legally rent the annexe out, there is a good chance that there may not be a claim.
The point you make regarding the seller having actual knowledge that it was not legally possible to rent out the annexe is interesting. If it can be said that the seller effectively stated that it was legally possible to rent out the annex when they had actual knowledge that this was not the case, then there could be a basis of claim in fraudulent misrepresentation.
As for your legal expenses insurance, this is complicated. We can work pursuant to that contract of insurance, but it is important to consider the terms of the policy; insurers like to appoint their panel solicitors and normally they provide the insurer with preferential charging rates.
We would need to consider the statements made and full facts of the matter before we could form a view on whether or not there is any sort of claim.