191 thoughts on “Property Misrepresentation Claims in Practice”
Hello, 2 years ago I bought a leasehold BTL flat with a share of freehold, managed by a company made up of the flat landlords. The lease describes the demised premises (flat) as interior only, not exterior, which latter is the responsibility of the management co. However, a few months ago, leaks appeared in my flat and I was told that as it was on the top floor, it was my obligation to fix them. I did so as there was no other way to resolve the leaks for my tenants. I am now trying to sell the flat and had a buyer who has now withdrawn after her conveyancer flagged that my having paid for roof repairs raises a issue with the lease and management. I have asked the management co. and they said that some years ago the landlords decided to relegate external wear and tear maintenance costs to owners to keep the service charges down. They did not draw up a deed of variation or otherwise reveal this to me when I bought the flat, but now that I have brought this to their attention, they plan either to raise the service charges or draw up a deed of variation. As a buyer 2 years ago, had I known about this I would not have bought it at all, or not at the price I paid. Having lost this sale, I am now paying costs on an empty flat and can safely assume I will not be able to sell, except at a loss of approximately £15K. Do I have any recourse such as misrepresentation or other? Also, do I have the right not to pay further service charges until this is resolved? Thank you.
The short answer is that a leaseholder has various means by which they can challenge service charges, ultimately ending up at the First-Tier Tribunal (Property Chamber – Residential Property) for a determination of what is reasonable. Further, the fact that it has been paid by you does not necessarily mean that the Tribunal cannot order the parties that “should” have paid to repay you. However the basis upon which that challenge may be pursued is going to depend on what has happened. For example, if there was a procedural irregularity, then this might have an impact on the position. A management company should ordinarily consult with lessees and give advanced notice of charges to be incurred. If they do not do this, then sometimes the charges are “capped” at a nominal sum. However, this does not generally do any favours for the lessees, as the work clearly was required and you do not want an insolvent management company.
The starting point would be to consider the terms of your lease and what “variations” to it were agreed by your predecessor. The extent to which such an agreement would be binding on future owners (i.e. you) is quite questionable. Unless a variation was entered into in writing (and registered at the Land Registry) it is possible that it is not binding on you. You, as a lessee, would not ordinarily have to agree to a new variation now; a party to a lease cannot unilaterally amend its terms.
Whether or not you would directly or indirectly be able to hold the management company or the lessees behind it liable for the inability to sell your flat is questionable, but not completely out of the question. It does depend on a number of things.
As for a misrepresentation claim, there would not be an obligation on a seller to disclose information to you. However, if you asked a question about this (and normally information about this sort of thing is provided in leasehold and property information forms), and the answer given was factually inaccurate, then there could be a claim against your seller.
These are all general points, so please do not take this as legal advice. A far more detailed consideration of your position would be required before we could suggest what your options are and how you might be best advised to proceed.
My issues from discoveries made from 2018 concern the misrepresentation of the cost price of a mortgaged property by the mortgage provider and the transfer of an inflated advance by the mortgage provider to a solicitor other than the one nominated by me on the mortgage application form. This facilitated the misappropriation of thousands of pounds I am being expected to repay with interest. Other issues include the acceptance by the mortgage provider of a mortgage application processed by an unregistered person using a company name the mortgage provider knew not to be in existence at the time of application.
We cannot provide legal advice on our website and in any event, are not certain precisely what the issues here are to be able to provide anything but speculative information about what issues might be in play.
It sounds as though you are suggesting that a solicitor, possibly mortgage valuer, or both, has obtained a mortgage advance greater than that which you asked for in your mortgage application. We have dealt with mortgage fraud cases in the past, for example, where a client’s name was fraudulently applied to around 10 mortgage applications. It appeared to us in that matter that perhaps the properties were deliberately over valued so a greater mortgage advance could be obtained than the value of the property and that our client’s signature had been electronically copied to 9 mortgage applications without their permission. Alternatively, is what happened that you obtained a remortgage of your property and the mortgage lender appointed their own solicitor, rather than one that you wanted, to deal with this? This would not in itself be unusual, as a mortgage lender is entitled to instruct whoever they want to.
We are not certain of your precise situation and would need to spend some time considering this with you before we could consider whether or not there is any scope to try to invalidate the mortgage agreement on the basis of illegality or other defence that you could deploy in respect of the repayment of the mortgage.
In 2006 I purchased a new build leasehold house from a well known residential developer on a large residential leasehold development. The property reservation form is completed by the developers sales representative. it is a 3 page carbonised document signed by myself and the sales representative. i paid £1000 non-refundable reservation fee this reservation form and receipt does NOT state the house tenure as leasehold or provide any leasehold information. the development also has a private estate management company this is also not stated on the reservation and receipt form. I received no pre-purchase leasehold information and no private estate information. I purchased the property in 2006 but only discovered thee two omissions in 2020 during covid lockdown when sorting out paperwork. i have retained all my original advertising/ marketing brochures and documents provided by the developer and leasehold is not stated ANYWHERE the private estate management company are also not stated in any of sales and marketing materials provided to me by the sales representative in the on site sales office. I received a copy of the leasehold contract 14 days after signing the reservation form and reserving a house with a £1000 non-refundable reservation fee and exchange contracts in 24 days (should have been 28 days but the developer had shortened the deadline by 4 days without my knowledge and consent) I received a coercive letter from the developer threatening me with loss of my reservation fee. house and special offer if I did not complete in 24 days I received no waiver to extend the deadline What is your opinion and advice am I too late to do anything?
Whilst we cannot make any reason assessment of the position without looking at matters in detail (which is one of the reasons why we cannot offer legal advice on our website), it’s sounds a little like sharp practice.
Leasehold houses in particular are now attracting a reasonable amount of attention and it will not be long before it is not possible to purchase one due to government intervention and proposed legislation. There is no need for a leasehold house, detached or not. A flat which is part of a larger building should be leasehold. This is needed so it is clear who is in charge of looking after various parts of the building which are not part of the flat.
We do think that it might be a little late for you to be able to do anything, however. The basic position for a misrepresentation claim against the seller would be that there is a six year limitation period to bring your claim, but it is hard to see where the misrepresentation was. Likewise, a breach of contract claim seems unlikely. You paid to reserve a property and then you would (or should) have been advised that it was leasehold when you purchased it.
As for your solicitor, who arguably should have advised you of the position (although we are not sure what the practice was in 2006), for professional negligence claims, there wills be a deadline of six years from completion (when the loss was suffered) to bring such a claim. This can be extended up to 15 years, if it can be said that you could not have objectively known about the issues, but this would only have given you until around 2021 to bring a claim.
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Hello, 2 years ago I bought a leasehold BTL flat with a share of freehold, managed by a company made up of the flat landlords. The lease describes the demised premises (flat) as interior only, not exterior, which latter is the responsibility of the management co. However, a few months ago, leaks appeared in my flat and I was told that as it was on the top floor, it was my obligation to fix them. I did so as there was no other way to resolve the leaks for my tenants. I am now trying to sell the flat and had a buyer who has now withdrawn after her conveyancer flagged that my having paid for roof repairs raises a issue with the lease and management. I have asked the management co. and they said that some years ago the landlords decided to relegate external wear and tear maintenance costs to owners to keep the service charges down. They did not draw up a deed of variation or otherwise reveal this to me when I bought the flat, but now that I have brought this to their attention, they plan either to raise the service charges or draw up a deed of variation. As a buyer 2 years ago, had I known about this I would not have bought it at all, or not at the price I paid. Having lost this sale, I am now paying costs on an empty flat and can safely assume I will not be able to sell, except at a loss of approximately £15K. Do I have any recourse such as misrepresentation or other? Also, do I have the right not to pay further service charges until this is resolved? Thank you.
Thank you for your comment.
The short answer is that a leaseholder has various means by which they can challenge service charges, ultimately ending up at the First-Tier Tribunal (Property Chamber – Residential Property) for a determination of what is reasonable. Further, the fact that it has been paid by you does not necessarily mean that the Tribunal cannot order the parties that “should” have paid to repay you. However the basis upon which that challenge may be pursued is going to depend on what has happened. For example, if there was a procedural irregularity, then this might have an impact on the position. A management company should ordinarily consult with lessees and give advanced notice of charges to be incurred. If they do not do this, then sometimes the charges are “capped” at a nominal sum. However, this does not generally do any favours for the lessees, as the work clearly was required and you do not want an insolvent management company.
The starting point would be to consider the terms of your lease and what “variations” to it were agreed by your predecessor. The extent to which such an agreement would be binding on future owners (i.e. you) is quite questionable. Unless a variation was entered into in writing (and registered at the Land Registry) it is possible that it is not binding on you. You, as a lessee, would not ordinarily have to agree to a new variation now; a party to a lease cannot unilaterally amend its terms.
Whether or not you would directly or indirectly be able to hold the management company or the lessees behind it liable for the inability to sell your flat is questionable, but not completely out of the question. It does depend on a number of things.
As for a misrepresentation claim, there would not be an obligation on a seller to disclose information to you. However, if you asked a question about this (and normally information about this sort of thing is provided in leasehold and property information forms), and the answer given was factually inaccurate, then there could be a claim against your seller.
These are all general points, so please do not take this as legal advice. A far more detailed consideration of your position would be required before we could suggest what your options are and how you might be best advised to proceed.
My issues from discoveries made from 2018 concern the misrepresentation of the cost price of a mortgaged property by the mortgage provider and the transfer of an inflated advance by the mortgage provider to a solicitor other than the one nominated by me on the mortgage application form. This facilitated the misappropriation of thousands of pounds I am being expected to repay with interest. Other issues include the acceptance by the mortgage provider of a mortgage application processed by an unregistered person using a company name the mortgage provider knew not to be in existence at the time of application.
Thank you for your comment.
We cannot provide legal advice on our website and in any event, are not certain precisely what the issues here are to be able to provide anything but speculative information about what issues might be in play.
It sounds as though you are suggesting that a solicitor, possibly mortgage valuer, or both, has obtained a mortgage advance greater than that which you asked for in your mortgage application. We have dealt with mortgage fraud cases in the past, for example, where a client’s name was fraudulently applied to around 10 mortgage applications. It appeared to us in that matter that perhaps the properties were deliberately over valued so a greater mortgage advance could be obtained than the value of the property and that our client’s signature had been electronically copied to 9 mortgage applications without their permission. Alternatively, is what happened that you obtained a remortgage of your property and the mortgage lender appointed their own solicitor, rather than one that you wanted, to deal with this? This would not in itself be unusual, as a mortgage lender is entitled to instruct whoever they want to.
We are not certain of your precise situation and would need to spend some time considering this with you before we could consider whether or not there is any scope to try to invalidate the mortgage agreement on the basis of illegality or other defence that you could deploy in respect of the repayment of the mortgage.
In 2006 I purchased a new build leasehold house from a well known residential developer on a large residential leasehold development. The property reservation form is completed by the developers sales representative. it is a 3 page carbonised document signed by myself and the sales representative. i paid £1000 non-refundable reservation fee this reservation form and receipt does NOT state the house tenure as leasehold or provide any leasehold information. the development also has a private estate management company this is also not stated on the reservation and receipt form. I received no pre-purchase leasehold information and no private estate information. I purchased the property in 2006 but only discovered thee two omissions in 2020 during covid lockdown when sorting out paperwork. i have retained all my original advertising/ marketing brochures and documents provided by the developer and leasehold is not stated ANYWHERE the private estate management company are also not stated in any of sales and marketing materials provided to me by the sales representative in the on site sales office.
I received a copy of the leasehold contract 14 days after signing the reservation form and reserving a house with a £1000 non-refundable reservation fee and exchange contracts in 24 days (should have been 28 days but the developer had shortened the deadline by 4 days without my knowledge and consent) I received a coercive letter from the developer threatening me with loss of my reservation fee. house and special offer if I did not complete in 24 days I received no waiver to extend the deadline
What is your opinion and advice am I too late to do anything?
Thank you for your comment.
Whilst we cannot make any reason assessment of the position without looking at matters in detail (which is one of the reasons why we cannot offer legal advice on our website), it’s sounds a little like sharp practice.
Leasehold houses in particular are now attracting a reasonable amount of attention and it will not be long before it is not possible to purchase one due to government intervention and proposed legislation. There is no need for a leasehold house, detached or not. A flat which is part of a larger building should be leasehold. This is needed so it is clear who is in charge of looking after various parts of the building which are not part of the flat.
We do think that it might be a little late for you to be able to do anything, however. The basic position for a misrepresentation claim against the seller would be that there is a six year limitation period to bring your claim, but it is hard to see where the misrepresentation was. Likewise, a breach of contract claim seems unlikely. You paid to reserve a property and then you would (or should) have been advised that it was leasehold when you purchased it.
As for your solicitor, who arguably should have advised you of the position (although we are not sure what the practice was in 2006), for professional negligence claims, there wills be a deadline of six years from completion (when the loss was suffered) to bring such a claim. This can be extended up to 15 years, if it can be said that you could not have objectively known about the issues, but this would only have given you until around 2021 to bring a claim.