191 thoughts on “Property Misrepresentation Claims in Practice”
We have purchased a property in a new built in 2016. Some of the neighbours had ‘snagging’ issues that resolution of kept being delayed as they had to be investigated. Several years on it turned out that there are major structural issues in the building and the housing association is suing the contractor who completed the design and build. We are now in a situation where if we decide to sell, we have to disclose the problems with the building, which means it’s unlikely that we’ll be able to find a buyer. The housing association doesn’t want to buy back the flats. If we stay we need to wait for the court case to end and then wait for the repairs to the building to be completed. Does it qualify for misrepresentation? Clearly the contractor must have known that they have cut corners and not completed the building to a required standard.
We are sorry to hear of this. Whilst no consolation, you are not alone here.
A misrepresentation is when one party to a contract says something which is factually inaccurate to the other, and relying on that the party decides to enter into the contract. Silence does not normally amount to a representation.
It sounds as though you may be dealing with the new Building Safety Act 2022. This has made significant changes to the law regarding the construction of new buildings which are not safe. It has fairly far reaching consequences for a developer and extensive leaseholder protections, which prevents the cost of remedial works being passed to the leaseholder. This legislation came about as a direct result of the Grenfell Tower tragedy, which involved defective and dangerous cladding.
Whilst clearly a buyer is going to have reservations about purchasing a property where it is not clear when and if any remedial works are to be undertaken, on the basis that you (or your solicitor) might be able to explain exactly what is happening to a buyer and that there could be some protections in place for them, you might be able to convince a buyer to proceed. Having said this, a conveyancing solicitor is probably not going to be overly inclined to advise on the ins and outs of the legislation and it is really up to a buyer to seek advise on the position from their own lawyer.
If you are considering marketing the property for sale, you are right that there is going to be an expectation on you to disclose these issues. As mentioned, silence will not ordinarily amount to a representation but if you refuse to answer questions connected to these problems, it might put a buyer off.
We bought a property in 2020 with outline planning to demolish the existing double garage and build a 3 bed detached. This is now complete and we have a buyer. His solicitor has discovered a strip of unregistered land inside our boundary. Our sellers stated on the initial enquiries this strip was outside the property boundary. This was false as the garage footprint was on it as is the new house now. We have asked them to sign a declaration so we may register the land but they refuse saying it is nothing to do with them. We cant sell for another 8 years until we have claimed it. All our life savings are now tied up.
Whilst it is not clear from what you say a “ransom strip” is not an uncommon thing to come accross. This is when a previous owner deliberately retains a crucial strip of land which means building will become difficult or impossible for the new owner. The owner of the strip of land might demand a payment to sell it.
We suspect that the reason that you are saying you cannot sell for another 8 years is because you need to prove at lease 12 years occupation of the area in question to claim possessory title to the unregistered strip of land.
We are not sure if this does give rise to a misrepresentation claim against the previous owners. It is possible but then they were (presumably) not surveyors. Much would turn on precisely what you were led to believe and whether or not it was sensible to rely on what they said. Whether or not your solicitor at the time should have identified this as an issue for the future, and pointed out the risk to you, is also questionable. Whilst clearly a little unreasonable (what difference does is make to them?), we are not sure you can compel the sellers to provide you with evidence of their period of ownership. All might not be lost, however, if you can still prove that they occupied the strip of land for the relevant period in question. An application to the Land Registy might still be possible and worthwhile. Also, discuss whether or not indemnity insurance is available with yor conveyancing solicitor. This is often a solution to a lot of issues which involve old rights over property which are not been enforced. We are not sure if insurance would be available for your situation, but it is worth making the enquiry.
I purchased a new build from company in December 2023. The back garden was fenced off and turf laid at my expense. The builders have approached me and stated that the fence was erected 1.5 meters too generous and they wish to reposition this, losing that amount by 20 meters wide with no apology or recompense. Is this misrepresentation as I perceived the fence to enclose my garden?
The starting point is to consider the terms of the contract itself. It is not unusual for a developer to reserve the right to make some, non-material, changes before completion but a loss of what sounds like a substantial part of your garden (depending on its overall size, of course) and to ask to move it after completion is not something we regularly come accross.
We can fully appreciate why you considered the boundary line to be where they erected the fence, especially if you viewed the property before exchange. The contract itself would normally contain a fairly standard clause that says there is no liability for misrepresentations unless these were set out on writing. If you have a plan or other document that you relied on as to where the fence would be, then you may possibly have a claim for misrepresentation.
There is also a fairly standard clause in residential conveyancing contracts which says the buyer accepts the property in the condition it is in on exchange of contracts. This might offer some scope for argument, subject to the precise wording of or any amendments to standard terms.
It could be that in proceeding to completion, there was an affirmation of the terms of the contract, notwithstanding that the fence was in the wrong place.
We are sorry that this is legally an unusual question. We would need to look at the contract and understand what happened leading up to exchange and completion. There is not a “they can/cannot do anything about it now” answer.
What we can say is that if there is a misrepresentation, it would almost certainly be the case that damages would be awarded to compensate you for your loss, rather than any other remedy. That loss would be the difference between the value of the property at the time of purchase with and without the “extra” bit of garden. This is called diminution in value.
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We have purchased a property in a new built in 2016. Some of the neighbours had ‘snagging’ issues that resolution of kept being delayed as they had to be investigated. Several years on it turned out that there are major structural issues in the building and the housing association is suing the contractor who completed the design and build. We are now in a situation where if we decide to sell, we have to disclose the problems with the building, which means it’s unlikely that we’ll be able to find a buyer. The housing association doesn’t want to buy back the flats. If we stay we need to wait for the court case to end and then wait for the repairs to the building to be completed.
Does it qualify for misrepresentation? Clearly the contractor must have known that they have cut corners and not completed the building to a required standard.
Thank you for your comment.
We are sorry to hear of this. Whilst no consolation, you are not alone here.
A misrepresentation is when one party to a contract says something which is factually inaccurate to the other, and relying on that the party decides to enter into the contract. Silence does not normally amount to a representation.
It sounds as though you may be dealing with the new Building Safety Act 2022. This has made significant changes to the law regarding the construction of new buildings which are not safe. It has fairly far reaching consequences for a developer and extensive leaseholder protections, which prevents the cost of remedial works being passed to the leaseholder. This legislation came about as a direct result of the Grenfell Tower tragedy, which involved defective and dangerous cladding.
Whilst clearly a buyer is going to have reservations about purchasing a property where it is not clear when and if any remedial works are to be undertaken, on the basis that you (or your solicitor) might be able to explain exactly what is happening to a buyer and that there could be some protections in place for them, you might be able to convince a buyer to proceed. Having said this, a conveyancing solicitor is probably not going to be overly inclined to advise on the ins and outs of the legislation and it is really up to a buyer to seek advise on the position from their own lawyer.
If you are considering marketing the property for sale, you are right that there is going to be an expectation on you to disclose these issues. As mentioned, silence will not ordinarily amount to a representation but if you refuse to answer questions connected to these problems, it might put a buyer off.
We bought a property in 2020 with outline planning to demolish the existing double garage and build a 3 bed detached. This is now complete and we have a buyer. His solicitor has discovered a strip of unregistered land inside our boundary. Our sellers stated on the initial enquiries this strip was outside the property boundary. This was false as the garage footprint was on it as is the new house now.
We have asked them to sign a declaration so we may register the land but they refuse saying it is nothing to do with them. We cant sell for another 8 years until we have claimed it. All our life savings are now tied up.
Thank you for your comment.
Whilst it is not clear from what you say a “ransom strip” is not an uncommon thing to come accross. This is when a previous owner deliberately retains a crucial strip of land which means building will become difficult or impossible for the new owner. The owner of the strip of land might demand a payment to sell it.
We suspect that the reason that you are saying you cannot sell for another 8 years is because you need to prove at lease 12 years occupation of the area in question to claim possessory title to the unregistered strip of land.
We are not sure if this does give rise to a misrepresentation claim against the previous owners. It is possible but then they were (presumably) not surveyors. Much would turn on precisely what you were led to believe and whether or not it was sensible to rely on what they said. Whether or not your solicitor at the time should have identified this as an issue for the future, and pointed out the risk to you, is also questionable.
Whilst clearly a little unreasonable (what difference does is make to them?), we are not sure you can compel the sellers to provide you with evidence of their period of ownership. All might not be lost, however, if you can still prove that they occupied the strip of land for the relevant period in question. An application to the Land Registy might still be possible and worthwhile.
Also, discuss whether or not indemnity insurance is available with yor conveyancing solicitor. This is often a solution to a lot of issues which involve old rights over property which are not been enforced. We are not sure if insurance would be available for your situation, but it is worth making the enquiry.
I purchased a new build from company in December 2023.
The back garden was fenced off and turf laid at my expense.
The builders have approached me and stated that the fence was erected 1.5 meters too generous and they wish to reposition this, losing that amount by 20 meters wide with no apology or recompense. Is this misrepresentation as I perceived the fence to enclose my garden?
The starting point is to consider the terms of the contract itself. It is not unusual for a developer to reserve the right to make some, non-material, changes before completion but a loss of what sounds like a substantial part of your garden (depending on its overall size, of course) and to ask to move it after completion is not something we regularly come accross.
We can fully appreciate why you considered the boundary line to be where they erected the fence, especially if you viewed the property before exchange. The contract itself would normally contain a fairly standard clause that says there is no liability for misrepresentations unless these were set out on writing. If you have a plan or other document that you relied on as to where the fence would be, then you may possibly have a claim for misrepresentation.
There is also a fairly standard clause in residential conveyancing contracts which says the buyer accepts the property in the condition it is in on exchange of contracts. This might offer some scope for argument, subject to the precise wording of or any amendments to standard terms.
It could be that in proceeding to completion, there was an affirmation of the terms of the contract, notwithstanding that the fence was in the wrong place.
We are sorry that this is legally an unusual question. We would need to look at the contract and understand what happened leading up to exchange and completion. There is not a “they can/cannot do anything about it now” answer.
What we can say is that if there is a misrepresentation, it would almost certainly be the case that damages would be awarded to compensate you for your loss, rather than any other remedy. That loss would be the difference between the value of the property at the time of purchase with and without the “extra” bit of garden. This is called diminution in value.