191 thoughts on “Property Misrepresentation Claims in Practice”
Hi Seller stated “no” to questions about property disputes and complaints. After moving in neighbour complained of escape of wastewater onto her property from ours causing damage. Neighbour has claimed the problem has been ongoing for a number of years prior to sale with a number of representations made to previous owner by the neighbours and the tenant who used to reside in our property. Neighbour has photographs documenting the problem from 2016. Both neighbour and previous tenant have provided statements confirming previous owner knew about the problem of escaping waste water, had it investigated by drainage expert who confirmed the issue but failed to resolve it. The drain in question appeared blocked at the time of survey and I requested remedial action before proceeding further. I received a en email and video from estate agent on behalf of selller stating “all drains running clear”. At the time I pressed my solicitors (same for vendor) on more information as to the root cause and/or receipt and guarantee of any works carries out. This was referred back across the office to “their” solicitor with nothing ever being returned.
In light of evidence I have in my possession, I consider the sellers “no” to disputes and complaints an unambiguous false statement of fact and I believe I have a strong case of fraudulent misrepresentation against the seller.
Question: Am i right? Im considering claiming through small claims as this isn’t a no win no fee situation. Is it just a case of wanting the seller to put it right or is there more to it? Can’t help but strongly feel like they intentionally lied/withheld information about the problem. I wonder what value the survey would come back with in light of the fact? Are there damages to be considered in this instance?
We cannot offer specific advice on our website. We would need to consider the position as a whole and this would include considering all of the relevant documentation, including the property information form you mention.
Broadly, fraudulent misrepresentation arises when the seller knowingly makes a false statement of fact. This involves proving the seller’s state of mind, which can be difficult.
As for any losses, more often than not in a misrepresentation claim like this, the losses would be assessed by reference to diminution in value. This is the difference between what the property was worth and what someone would pay for it knowing about the issue in question.
As for your solicitor, if your solicitor failed to follow your instructions to secure a guarantee, or at least advise you that it was not provided, there could be a negligence claim. Much would depend on your precise instructions and the scope of the solicitor’s retainer, being what the solicitor agreed to do for you and what responsibilities your solicitor assumed. If it can be said that your solicitor was negligent, and any loss you have suffered flows directly from that negligence, you may be able to claim this.
I have just bought a property at auction 4 days ago. Nowhere in the legal pack is stated that the Property is of non standard construction PRC house. I just found out this information and this has devastating financial implications as the house is considered non mortgageable and the cost to repair is beyond belief. I already paid 10% deposit, is there a case for misrepresentation or any other way I could recuperate my money? Any other ground to get out of the deal? Many thanks.
We cannot advise on specific circumstances on our website, not least because the contractual terms agreed between you and the seller would need to be considered in detail, as would the contents of the auction pack.
However, the general position is that there would not normally be an obligation on any seller, whether by auction or private sale, to say anything about the construction of the property. This is normally the remit of the buyer’s surveyor. Unless it can be said that the seller actively misled you and in effect said that as a matter of fact, the property was of a standard or mortgageable construction, it is unlikely that you would have a claim. If you assumed that this was the case and did not check the construction, it cannot be said to be the fault of the buyer.
Often with auctions, the terms are very tightly drafted to pass all of the risk on to the buyer. It is therefore up to the buyer to make enquiries and satisfy themselves as to whether or not they want to proceed with the purchase. Often the buyer is not even given an opportunity to ask questions or send a surveyor to the property and in those circumstances, the buyer has to decide whether or not to risk buying the property in the absence of more information. This epitomises the phrase ‘buyer beware’.
We often see situations where a mortgage lender has made an offer in principle, only to withdraw this when a defect or non-standard construction is discovered after the hammer falls. Sadly much of the time and in the absence of fraudulent behaviour on the part of the seller (this is not the same as saying nothing about an issue) there is not much that can be done and the buyer has to decide whether to proceed with the purchase or forfeit their deposit. Often they may also have contractually agreed to pay other fees and charges.
When considering bringing a claim of misrepresentation as a buyer – what exactly is admissible as ‘evidence’. Reading these comments, it’s purely down to what’s in the property forms and any follow up enquiries via the conveyancer.
Can conversations directly with the estate agent or seller be brought into the mix. Either verbally on a viewing or via email/phone conversation? Is the only information that’s admissible the communication that will have gone via the conveyancer and on the ‘official’ property forms and enquiries?
Generally speaking, anything which is relevant to the facts of a matter is evidence that needs to be taken account of and considered. Whether or not it can be used in any subsequent proceedings is likely to turn on the terms of the contract that were agreed.
The standard conditions of sale prepared by the Law Society are almost always incorporated into a contract for the sale of residential property. Unless amended, there is normally a standard special condition 6, which says that contractually, the buyer is agreeing that they have only relied on representations made in writing and passing between the buyer and seller and their solicitors. This effectively precludes oral representations being relied on in a claim as reliance is a necessary constituent of a misrepresentation claim. This is not an unreasonable thing to do on the basis that a primary reason for agreeing any contract is to provide a degree of certainty in any matter as to the rights, obligations and liabilities of the parties. By saying that only things committed to writing during the course of the transaction and passing between the parties avoids arguments about things said or done and the significance of these later on. If something is particularly important to someone, then it is incumbent on them to negotiate an appropriate clause in the contact.
This is also why the property information form (TA6) is normally the primary source of evidence to take into consideration, as this and the enquiries raised and answered are in writing and pass between the parties’ solicitors. However, oral representations are sometimes relevant to matters. This is particularly the case where there is fraud or recklessness. Liability for fraud cannot be excluded from a contract. If it has not been amended, the standard special condition 6 also states that oral representations can be used as evidence if oral representations are made recklessly. A reckless misrepresentation is broadly something said without knowing or caring about the truth of it.
As for text messages and emails, if these were in writing and passing between the buyer and seller, we would say that these fall within the remit of special condition 6; they are things said in writing and passing between the parties. There would not be any reason that we could see that these could not be relied on as evidence.
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Hi
Seller stated “no” to questions about property disputes and complaints.
After moving in neighbour complained of escape of wastewater onto her property from ours causing damage.
Neighbour has claimed the problem has been ongoing for a number of years prior to sale with a number of representations made to previous owner by the neighbours and the tenant who used to reside in our property. Neighbour has photographs documenting the problem from 2016.
Both neighbour and previous tenant have provided statements confirming previous owner knew about the problem of escaping waste water, had it investigated by drainage expert who confirmed the issue but failed to resolve it.
The drain in question appeared blocked at the time of survey and I requested remedial action before proceeding further. I received a en email and video from estate agent on behalf of selller stating “all drains running clear”. At the time I pressed my solicitors (same for vendor) on more information as to the root cause and/or receipt and guarantee of any works carries out. This was referred back across the office to “their” solicitor with nothing ever being returned.
In light of evidence I have in my possession, I consider the sellers “no” to disputes and complaints an unambiguous false statement of fact and I believe I have a strong case of fraudulent misrepresentation against the seller.
Question: Am i right? Im considering claiming through small claims as this isn’t a no win no fee situation. Is it just a case of wanting the seller to put it right or is there more to it? Can’t help but strongly feel like they intentionally lied/withheld information about the problem. I wonder what value the survey would come back with in light of the fact? Are there damages to be considered in this instance?
Thank you for your comment.
We cannot offer specific advice on our website. We would need to consider the position as a whole and this would include considering all of the relevant documentation, including the property information form you mention.
Broadly, fraudulent misrepresentation arises when the seller knowingly makes a false statement of fact. This involves proving the seller’s state of mind, which can be difficult.
As for any losses, more often than not in a misrepresentation claim like this, the losses would be assessed by reference to diminution in value. This is the difference between what the property was worth and what someone would pay for it knowing about the issue in question.
As for your solicitor, if your solicitor failed to follow your instructions to secure a guarantee, or at least advise you that it was not provided, there could be a negligence claim. Much would depend on your precise instructions and the scope of the solicitor’s retainer, being what the solicitor agreed to do for you and what responsibilities your solicitor assumed. If it can be said that your solicitor was negligent, and any loss you have suffered flows directly from that negligence, you may be able to claim this.
I have just bought a property at auction 4 days ago. Nowhere in the legal pack is stated that the Property is of non standard construction PRC house. I just found out this information and this has devastating financial implications as the house is considered non mortgageable and the cost to repair is beyond belief. I already paid 10% deposit, is there a case for misrepresentation or any other way I could recuperate my money? Any other ground to get out of the deal? Many thanks.
Thank you for your comment.
We cannot advise on specific circumstances on our website, not least because the contractual terms agreed between you and the seller would need to be considered in detail, as would the contents of the auction pack.
However, the general position is that there would not normally be an obligation on any seller, whether by auction or private sale, to say anything about the construction of the property. This is normally the remit of the buyer’s surveyor. Unless it can be said that the seller actively misled you and in effect said that as a matter of fact, the property was of a standard or mortgageable construction, it is unlikely that you would have a claim. If you assumed that this was the case and did not check the construction, it cannot be said to be the fault of the buyer.
Often with auctions, the terms are very tightly drafted to pass all of the risk on to the buyer. It is therefore up to the buyer to make enquiries and satisfy themselves as to whether or not they want to proceed with the purchase. Often the buyer is not even given an opportunity to ask questions or send a surveyor to the property and in those circumstances, the buyer has to decide whether or not to risk buying the property in the absence of more information. This epitomises the phrase ‘buyer beware’.
We often see situations where a mortgage lender has made an offer in principle, only to withdraw this when a defect or non-standard construction is discovered after the hammer falls. Sadly much of the time and in the absence of fraudulent behaviour on the part of the seller (this is not the same as saying nothing about an issue) there is not much that can be done and the buyer has to decide whether to proceed with the purchase or forfeit their deposit. Often they may also have contractually agreed to pay other fees and charges.
Hi there,
When considering bringing a claim of misrepresentation as a buyer – what exactly is admissible as ‘evidence’. Reading these comments, it’s purely down to what’s in the property forms and any follow up enquiries via the conveyancer.
Can conversations directly with the estate agent or seller be brought into the mix. Either verbally on a viewing or via email/phone conversation? Is the only information that’s admissible the communication that will have gone via the conveyancer and on the ‘official’ property forms and enquiries?
Thank you for your comment.
Generally speaking, anything which is relevant to the facts of a matter is evidence that needs to be taken account of and considered. Whether or not it can be used in any subsequent proceedings is likely to turn on the terms of the contract that were agreed.
The standard conditions of sale prepared by the Law Society are almost always incorporated into a contract for the sale of residential property. Unless amended, there is normally a standard special condition 6, which says that contractually, the buyer is agreeing that they have only relied on representations made in writing and passing between the buyer and seller and their solicitors. This effectively precludes oral representations being relied on in a claim as reliance is a necessary constituent of a misrepresentation claim. This is not an unreasonable thing to do on the basis that a primary reason for agreeing any contract is to provide a degree of certainty in any matter as to the rights, obligations and liabilities of the parties. By saying that only things committed to writing during the course of the transaction and passing between the parties avoids arguments about things said or done and the significance of these later on. If something is particularly important to someone, then it is incumbent on them to negotiate an appropriate clause in the contact.
This is also why the property information form (TA6) is normally the primary source of evidence to take into consideration, as this and the enquiries raised and answered are in writing and pass between the parties’ solicitors. However, oral representations are sometimes relevant to matters. This is particularly the case where there is fraud or recklessness. Liability for fraud cannot be excluded from a contract. If it has not been amended, the standard special condition 6 also states that oral representations can be used as evidence if oral representations are made recklessly. A reckless misrepresentation is broadly something said without knowing or caring about the truth of it.
As for text messages and emails, if these were in writing and passing between the buyer and seller, we would say that these fall within the remit of special condition 6; they are things said in writing and passing between the parties. There would not be any reason that we could see that these could not be relied on as evidence.