Following on from our blog “My Seller Lied to Me!”, we thought we would set out some examples of real cases of claims for
misrepresentation that have been decided on by the Courts.
A recap of the position – what is misrepresentation?
A contract to purchase a property is no different to any other contract. If one party to a contract says something which isn’t factually accurate and the other party relies on that statement when entering the contract, this can give rise to a claim for misrepresentation.
If someone suffers a financial loss as a result of the reliance that they have placed on a representation which is false, then the aggrieved party can normally claim damages to compensate them for this.
In some cases it is possible to rescind the contract. Rescission means putting the parties in the position that they would have been in had the contract not been entered into, effectively “reversing” the transaction completely.
Misrepresentation in property transactions
If the seller of a property makes a false statement of fact about it and the buyer relies on this statement when deciding to proceed with the purchase, if this causes the buyer a loss, the buyer may have a misrepresentation claim against the seller.
Property transactions normally follow a well-established process. Part of this process includes the buyer asking questions about the property and the seller answering them. These questions are called pre-contract enquiries. To speed the process up, certain basic information about the property is normally given in advance by the seller, by completing a Property Information Form or TA6.
How misrepresentations happen
Property transactions normally follow a well-established process. Part of this process includes the buyer asking questions about the property and the seller answering these. These are called pre-contract enquiries.
To speed the process up, certain basic information about the property is normally given in advance by the seller, by completing a property information form.
The Law Society has published standard forms which many solicitors will use, but there is no rule to say that a bespoke form cannot be used or indeed that a seller needs to provide this at all. However, if a seller does not provide this information, a buyer may be unwilling to proceed.
The standard forms which are normally used in property transactions include the Seller’s Property Information Form (TA6 – sometimes referred to as a SPIF) and Sellers Leasehold Information Property Form (TA7 – for leasehold transactions). There are other standard forms which the Law Society have produced and may also contain information, when completed, which amount to representations.
Warnings to both the buyer and seller appear on the standard property information forms, informing the parties that the seller must answer the questions accurately because the buyer is entitled to rely on them when deciding whether or not to enter into the contract.
Whilst much of the time it is what appears in the property information form which forms the basis of a misrepresentation claim, any statement about the property which is untrue can be capable of amounting to a misrepresentation. Written (and sometimes even oral) correspondence between the parties and their solicitors can amount to misrepresentations too. It is important to consider the contractual terms, as these would normally look to exclude or limit liability for things said outside of what is recorded in the contract.
Mistakes can happen and a seller can make an “innocent misrepresentation”. Sometimes, a seller may make a “reckless misrepresentation”, saying something without caring or checking whether or not the statement is accurate. In some cases, a seller might deliberately say something which is misleading so the buyer proceeds with the transaction, which may amount to a “fraudulent misrepresentation”.
So what happens when the buyer discovers the truth? We have set out below some real cases, decided by the Courts, to give you an idea of how these cases are dealt with in practice.
What is a false statement of fact?
Historically, only a statement of fact which was false was considered a basis to bring a misrepresentation claim. An incorrect statement about the law, or a person’s opinion of something, were not considered capable of being misrepresentations.
However, in Pankhania v LB Hackney [2002], the Court established that in some cases, a statement as to the legal position can amount to a statement of fact. In that case, the buyers purchased a property on the basis that the existing occupiers were licensees and not tenants.
This was important, as it is easier to terminate a business licence than a business tenancy. The Court considered this to amount to an actionable misrepresentation, even though the inaccurate statement related to the legal position between the seller and existing occupier.
What if the seller doesn’t know?
If a seller does not know the answer to a question in the seller’s property information form, it is important that they do not speculate or suggest anything other than to explain that they do not know the answer. To suggest anything else can lead to trouble.
A primary authority on this point is William Sindall Plc v Cambridgeshire CC [1993]. In that case, the seller of a piece of land for development was asked whether or not they were aware of any rights affecting the property, other than those which could be seen on an inspection or which had not been disclosed in the contract.
The seller answered “not as far the vendor is aware”. This seemingly innocuous statement was considered by the Court to be a false statement of fact.
In fact a sewer ran underneath the land and this was not discovered until after completion. The Court confirmed that the statement “not so far as the vendor is aware” implied that the seller had taken steps to verify what they were saying was correct.
In short, the Court found that the seller had effectively said “I have checked, but can’t find anything”.
What if a buyer has not “relied” on the misrepresentation?
For a claim for misrepresentation to exist, there must be reliance on the part of the person that the representation is made to. If it does not influence the decision to enter into the contract, it cannot be a misrepresentation.
It doesn’t have to be the sole reason for entering into the contract, but it does have to be material and induce the person to enter into it, normally without making enquiries that they may otherwise have made. It generally also does not matter if someone can discover the truth if they had taken steps to do so.
In another case where the phrase “not so far as the seller is aware” was used is Clinicare Ltd v Orchard Homes Development Ltd [2004]. In that case, the prospective tenant of a commercial property asked about dry rot in the property and relied on this response from the landlord, even though the landlord advised the tenant to instruct their own surveyor, which they did.
The surveyor reported dry rot in the roof space. In fact there was also dry rot in the staircase and the surveyor suggested further enquiries about the staircase should take place. The tenant didn’t do this.
The Court held that the decision to ignore the seller’s advice to investigate the staircase further was based on the fact that the seller had said that it was unaware of any dry rot in the premises.
In Redgrave v Hurd (1881), a solicitor was advertising for a partner to join his practice and made claims which were factually untrue about the profitability of the practice.
Even though the prospective partner was given the opportunity to “discover the truth” by inspecting paperwork, and he decided not to, it was held on appeal that there had been an innocent misrepresentation.
In short, the prospective partner was reasonably entitled to rely on the statement made by the existing partner, even though had he checked, he would have realised that the practice was not as profitable as was claimed.
Does a seller have to correct a buyer’s misunderstanding of something?
Silence does not normally amount to a misrepresentation. Normally there has to be something specifically said which is factually untrue; the buyer cannot rely on a statement if it is never made.
However, sometimes allowing the other party to the contract to proceed on an obvious error or misunderstanding without correcting this can amount to a misrepresentation.
Whilst not a property misrepresentation case, the principles of National Westminster Bank Plc v Angeli Luki Katonou [2006] are still relevant. In that case a personal guarantee for a loan was given on the basis that the bank had led the borrower to believe that his company’s loans, including the one being guaranteed, would not be subject to debt collection processes.
The Court decided that the guarantee was given as a result of a negligent misrepresentation in failing to correct the guarantor’s understanding. The guarantee was rescinded and held to be unenforceable by the Court.
Can I force the seller to take the property back?
Rescission can sometimes be available as a remedy for a misrepresentation claim. However, it is what is known as an “equitable remedy” and is therefore at the Court’s discretion. The Court will not award rescission as a remedy unless damages would not adequately compensate the aggrieved party.
With property transactions it is a rare case where the contracts can effectively be reversed and the seller be forced to take the property back and refund the purchase price.
In Harsten Developments Ltd v Bleaken and Others [2012], a developer bought a site at auction and based part of the decision to so on information contained in the auction pack, which was made available to potential bidders in advance. The information provided included factually inaccurate information about the boundaries and a sewer.
The Court confirmed the position that rescission as a remedy to a misrepresentation claim is only generally available in cases of reckless or fraudulent misrepresentation.
The overall result of this case was that the Court applied its discretion under section 2(2) of the Misrepresentation Act 1967 and ordered rescission, along with damages for the other expenses.
Ross River Ltd v Cambridge City Football Club Ltd [2007] involved the sale and leaseback of a football stadium. In this particular case, the Court found that material misrepresentations had been made, and these were done with a view to influence the negotiations relating to the transaction.
As this was considered to be in the mind of the misrepresenting party, the Court considered this to be a fraudulent misrepresentation and ordered rescission of the contract.
What happens if the representation was true when it was made but is now factually inaccurate?
In some cases, a change in circumstances, rendering a previously true representation subsequently inaccurate, can give rise to a duty to update the other party.
In Spice Girls Ltd v Aprilia World Service [2002] the issue was whether or not there was effectively an implied representation that the pop group would not split up for the duration of an advertising contract.
Of course, the group did split up, which resulted in Court action being taken. The Court determined that there was a duty to correct the misunderstanding when it became clear that this was going to happen.
In the case of FoodCo UK LLP v Henry Boot Developments Ltd [2010] this principle was considered in the context of property.
It involved a motorway service station and a proposed development to the local area which would have increased the number of customers to the site. This development did not go ahead.
The Court decided that unless the representing party knew that the previous representations had become false, or did not care whether or not they had, there was no duty to correct the previous representation.
When buying and selling property, caution should be exercised if a seller becomes aware of a change of circumstances. It is generally best to correct any representations which subsequently become untrue as a result of a change of circumstances.
It’s my solicitor’s fault!
It is important to also understand that when a solicitor, giving or receiving information on behalf of their client, their client will be deemed to have that information.
In Strover v Harrington [1988] a property which did not have mains drainage was described as agents and then the valuer as having so. In fact, the seller had given the correct information to the buyer’s solicitor who had failed to pass this on to the buyer client.
It was held that the reason for the loss to the buyer was not as a result of the misrepresentation but because the buyer’s solicitor had not passed the correct information on. In such a case, the solicitor would potentially be liable for a claim for professional negligence.
The converse is also true.
In Cemp Properties (UK) Ltd v Dentsply [1989], the seller’s solicitor stated that certain documentation was not available when in fact it was. Had those documents been supplied to the seller, the seller would have discovered a number of problems with the property.
The buyer was successful in their claim against the seller and no doubt, the seller pursued a claim against their solicitor for professional negligence after this.
The seller told me that everything with the neighbours was fine
In McMeekin v Long [2003], the seller expressly answered “no” to questions about whether or not there were any disputes with neighbours or complaints about them as owners. The sellers in fact went further and orally stated that the neighbours were friendly.
The reality of the position was that there was an ongoing dispute about access to the property, parking and the access road, which the sellers had a right of way over.
The seller suggested that the dispute had been resolved, but the Court considered that there was a continuous confrontational atmosphere between the seller and the neighbours.
The Court specifically referred to how clear the questions in the property information form were and how it was written in such a way that it was designed for everyone to use and did not require any specific legal knowledge.
Based on the fact that anyone would clearly consider the facts of this case to amount to a dispute, the Court decided that there had been a fraudulent misrepresentation.
The seller told me that the property had never flooded
Whilst a Scottish case, and therefore not directly relevant to English Law, the case of Anwar v Britton [2018] (which involved arguments regarding a contractual clauses which sought to exclude representations), gives an example of how subjective questions regarding historical flooding of property can be and what flooding in fact means.
To one person, waterlogging may not constitute flooding, to others, it may very well do.
In this case, the buyer obtained a flood report which identified a low flood risk and recommended that the buyer raise this point with the seller. The seller’s solicitor explained that the seller had not experienced issues of flooding. It transpired that the stream which ran near the property had overflowed from time to time.
The Court held that this was a misrepresentation.
The seller said that there was no Japanese Knotweed on the property
Whilst we are unaware at this time of any reported cases on Knotweed, considering the increase in the number of nuisance claims arising as a result of knotweed being present on neighbouring land following cases such as Network Rail Infrastructure Limited v Williams [2018], it would not surprise us if there have been unreported misrepresentation claims.
Knotweed can be difficult and costly to eradicate, and to be informed that it is not present on the property when in fact it is or was, may very well amount to an actionable misrepresentation.
The seller told me that they were not aware of any developments or planning proposals in the area
In the case of Thorpe v Abbotts [2015] the sellers answered “No” to questions in the seller’s property information form regarding whether or not they had received any planning or other notices affecting the property or had any discussions or negotiations with any neighbour or authority about this.
The sellers had in fact attended public meetings regarding the proposed development of a site nearby to the property. This was at the time one of a number of sites that the local authority were considering for development.
Despite this, the Court found that there had been no misrepresentation. Broadly, the Court highlighted the fact that the property information form was designed for lay people to complete and required no specialist legal knowledge.
With this in mind, it considered that the answers to the questions were factually accurate, as at the time no definite plan to develop the nearby site had been reached, no planning notice served and no specific negotiations had taken place.
The seller told me that everything with the landlord was fine
In leasehold purchases, the new owner will become liable for the breaches of the lease by the previous tenant.
For example, if things such as ground rent or service charges have not been paid, it would mean that the new owner would be liable to pay these. It is therefore important that the position with the landlord is established and standard forms, including the leasehold information form, are normally used for this purpose.
In Greenridge Luton One Ltd v Kempton Investments Ltd [2016] the seller of an office block suggested in the Commercial Property Standard Enquiries Form that the tenant was not in arrears of service charges. This was not the case and significant arrears were found after exchange but before completion.
The Court held that this amounted to a misrepresentation and that the buyer was entitled to rescind the contract and recover its deposit.
What about auctions?
In Atlantic Estates Ltd v Ezekiel [1991] a property was put into an auction. The sales particulars in the auction catalogue described the property as a wine bar and showed a photograph of the wine bar with customers going in and out. The property did not in fact have a licence and was not currently used as a wine bar.
On appeal the Court found that the description of the property as a wine bar and the photograph together amounted to a misrepresentation, insofar as it suggested that there the premises could immediately be used as a wine bar.
With auctions, it is always advisable to take the auction pack, the relevant contractual terms and auction terms and conditions to a solicitor to check the position before bidding. Whilst the seller does not have to volunteer more information about it, this process does help to identify risks and potentially costly mistakes.
So what does the seller have to tell a buyer?
The short answer to this is “nothing”.
If the seller makes no representations about the property and tells the buyer to rely solely on their own investigations, there can be no claim for misrepresentation. The principle that applies is “buyer beware” or “caveat emptor”; it is for the buyer to decide whether or not to purchase the property based on the information they have.
In the case of Sykes v Taylor-Rose [2004], a question appearing in the property information form used at the time asked the seller the extremely broad question “Is there any other information which you think the buyer may have a right to know?” The seller answered “No”.
In fact, a murder had taken place in the property in the past but the Court decided that this was not something which the seller was obliged to disclose.
It considered that the question was subjective and on the basis that the sellers had answered it honestly, namely that they did not think it was relevant to the purchase, it was held that there had been no misrepresentation.
Conclusion
Every property misrepresentation case turns on its own unique facts. Whilst principles established in historical cases may be relevant, the simple solution to avoid issues in the future is to answer questions honestly or not at all.
However, mistakes can happen and if you have been adversely affected by a misrepresentation in any transaction, do feel free to get in touch with us.
This article is for information only. It is not a precise statement of the law and should not be relied upon as or for a substitution for proper legal advice. The circumstances of every case are different. We are always happy to discuss your circumstances to see if we can assist.
We have just bought a property at auction in Scotland, but have not completed yet. The property was advertised with a tenant paying rent at a yield of 7%. When the auction was over the vendors anounced that no such tenancy existed and the tenant had a life rent (registered agreement to stay in the property for the rest of their lives for no payment effectively).
We are now faced with completing the purchase and not getting any return on the investment for decades, whilst being faced with maintenance costs – or refuse to pay (already paid 10% deposit) and let the vendors chase us for any potential losses they incur on resale.
The small print in the auction sale terms are that they are not responsible for any misrepresentation and it is our duty to check the validity of all statements prior to the auction.
The repeated claims that the property was generating a reasonable income were blatantly misleading and unfortunately we took them at their word. Please can you advise – we would value any help you can give.
Thank you for your comment.
We are sorry to say that we cannot advise on Scottish law, just the law of England and Wales.
I sold a property and on TA6 form marked no to Japnese Knott Weed. I was not aware that there was in fact JKW present. The buyers appointed a level 3 RCIS surveyor who took photos of JKW and also failed to identify the weed. Buyers failed to check the surveyors report and act on it. Buyers are now taking me to court for marking no to presence of JKW. I have offered to pay part of the cost to eradicate the weed, but buyers have refused and want me to pay full amount plus the devaluation of property.
Thank you for your comment.
On the standard property information form, we believe that they is also a “don’t know” or “not known” box to tick.
On this basis, it would seem that you had the option to tick such a box (or at least not answer at all, or explain you didn’t know) rather than effectively confirming that you had checked and were sure that knotweed was not present.
The buyer does not have to sue their surveyors if they do not want to. It may be the case that there is a possible defence for them as well (can it be said that a surveyor would definitely have spotted the knotweed?).
Whilst we cannot give legal advice on our website, it may be worthwhile you seeking this, as from what you have said, you could be at risk of a claim and may need assistance in mitigating any loss.
I purchased a property over 12 months ago. On viewing the property I asked the sellers if there were any parking issues being a narrow street. They advised me they had their own parking spot at the rear of the property. On the property information form they have stated no access/right of way issues, no disputes with neighbours and that they park at the rear or front of property. I recently had a knock at the door advising I was not allowed to park at either the front or rear of the property as it is private land. If I was aware that there was no parking with the property I would not have gone ahead with the purchase. The owners of the private land have provided their deeds and proof of solicitors letters sent to the previous owners advising that they could purchase some of the land to use for parking and so they were well aware of this issue and it had been an ongoing dispute for a number of years. Would i have a case for misrepresentation?
Thank you for your comment.
There may be a claim for misrepresentation. However, you would likely need to prove that the sellers were aware of the issues and deliberately misled you (i.e. a “fraudulent” misrepresentation). The chances are that your contract of sale incorporated the standard conditions of sale. These exclude liability for oral representations. In the absence of fraud, these would prevent you from taking action against the seller for things said to you orally, at a viewing, for example.
It may also be the case that you have a claim against your solicitor. This would depend on precisely what they agreed to do for you and whether or not a “reasonably competent conveyancing solicitor” should have spotted any legal issues regarding the point.
Hello there!
In August 2021, my spouse and I purchased a property based on the information provided by the previous owners through the property information form. It was indicated in this form that no underpinning of the property had taken place. Regrettably, as this was our first property purchase, we did not seek a home report, which in hindsight was a lapse in judgment and had very poor solicitors 🙁
Subsequently, we have learned that the property had, in fact, undergone underpinning prior to our purchase, and it appears that the sellers were aware of this, as they possessed information pertaining to it. This information was not disclosed to us during the transaction.
Given the circumstances, we are seeking your guidance to understand the implications of this nondisclosure and explore potential legal remedies or actions we may take to address this issue?
Thank you for your comment.
The basic position is that if, as a matter of fact, the seller told you something which was incorrect (and because of the terms of the contract, this would normally have to be in writing but would include the property information form) there is probably a basis of claim in misrepresentation.
You say that the seller ‘indicated’ that the property had not been underpinned. It isn’t clear from what you say whether or not a definite ‘yes’ or ‘no’ answer was given to a specific question regarding underpinning. Broadly, the clearer the question and the clearer the answer, the easier it is to argue that it was factually inaccurate and therefore misleading, which is the fundamental point in any misrepresentation claim. If a buyer has made assumptions or otherwise not relied on what the seller has said (for example, you cannot rely on silence) there would not be a claim.
Underpinning can be serious business and normally the owner would need to obtain building regulation sign off once the work is completed. Whether or not this particular issue should have been spotted by your solicitor is questionable but something we would be able to check for you.
In terms of the implications, that is a very broad question. We suspect that you probably would have a reasonable basis of claim but we would need to consider the position in detail, which is why we cannot give specific advice on our website. Whether or not you wished to pursue a claim would fundamentally be your choice. If your query is aimed more at understanding what you might achieve from pursuing a claim, this would almost certainly be damages, aimed at compensating you for the loss that you have suffered. That loss is likely to be based on diminution in value. This is the difference between what the property was worth at the time with and without the defect complained of. This isn’t always the same as the cost of any residual works.
If you would like to explore the matter in more detail, please do get in touch.
Hi, this is about the CPSE form.
We’ve bought a property to refurbish from a community centre. When filling out the CPSE they mentioned that they had had no problems or issues with fire risk assessment report
We’ve since exchanged and discovered that not only do they not have a fire risk assessment report, there is a massive fire risk with next door’s flats placing their commercial rubbish bins against our wall next to a protected fire exit route
Do you believe they have misrepresented?
Thank you for your comment.
We can only provide general guidance on our website, and cannot provide legal advice on specific circumstances. Whether or not there is a claim for misrepresentation will depend on the precise words used. Certainly suggesting that there were “no problems” with a particular report implies that such a report existed. If that was not factually the case, there could be a claim for misrepresentation.
However, suggesting that a report exists is arguably not the same as saying that it is a favourable report nor that it was valid. Whether or not it is reasonable to have relied on such a representation is therefore questionable.
It might be more beneficial to consider the advice that your solicitor or surveyor gave to you. If it can be said that a reasonably competent surveyor or solicitor would have advised you to obtain a copy of any report prior to exchange and completion, there may be a basis of claim in negligence against them.
Hi. As a buyer of a redevelopment property in 2016 our Solicitors asked the sellers legal rep to confirm the property was not in breach of covenant clause to which the reply was “Our client so confirms”.
Now 7 years later and new neighbours have stated that our home is in breach via legal letter and threatening legal action!
Do we have a misrepresentation claim if it’s found it actually is in breach?
Feel like we are stuck in the middle here, and its not our fault
Thank you for your comment.
Leaving aside questions of whether or not you have any deadline to pursue a claim, whether or not there is a claim in misrepresentation will depend on a number of factors.
It sounds to us that the enquiry made by your solicitor of the seller was a fairly standard one and a sensible one at that. It also appears that the answer given was very definite, namely that “No” the seller was not in breach of any restrictive covenants. Ordinarily a statement of the legal position of something is not actionable, however, there is some case law which could be relied on in these circumstances, that effectively a statement of the legal position is a matter of fact i.e., that there are no breaches.
A more complicated matter is likely to turn on whether or not you are out of time to bring a claim. A misrepresentation claim would normally have a limitation period of 6 years from the date of completion. You may therefore find that you are out of time to pursue a claim against the seller. This position can change if there was a deliberate concealment or fraud, but that is a difficult thing to prove.
It is also worthwhile considering whether or not the restrictive covenant is enforceable. You have not explained what this is, but this is always a point worth checking.
If you would like to consider instructing us to look into the matter in a bit more detail, please do feel free to get in touch.
I have bought an off plan flat and exchanged in a few years ago. Only after the completing, found out that floor size of the flat has now been reduced around 10% against the contractual Floor Plan. The Seller keeps silent on the actual floor size and NOT provide me with any latest version of Floor Plan for registration. Pls point me with the right direction on how to deal with this matter.
Thank you for your comment.
Your starting point will always be the terms of the contract. It is not unusual for developers to have the right to make alterations to a property, provided that this does not have a material impact on its value. This is to enable the developer to make changes that it needs to for any reason to proceed with the build to completion. There might be a lack of materials. There may have been a need to make changes to the build to comply with certain requirements.
On the assumption that the developer contractually agreed with you that you would have a flat of a certain size but has not provided this, there would be a claim for breach of contract (unless the contract says something different). Your loss would likely be assessed by reference to diminution in value. This is the difference between what the property was worth in the size agreed (normally what a seller pays, but not always) and what a seller would have paid for the actual size.
Hello
I purchased a property from a major developer where the total development includes commercial space designated for specific use. The planning consent includes a condition to market the commercial space for its allocated use before a certain percentage of homes are occupied. The developer’s solicitor provided an information sheet at the time of purchase in which they stated that they would meet this condition.
Subsequently the developer applied to have the condition removed and, when this was unsuccessful, they ignored it and have now received a notice of enforcement from the borough council.
All purchasers made their buying decisions based on the originally approved plans and the developer did not inform people that they would not meet the condition as they had previously said they would.
The developer has entered into a contract to sell the land to a large company for a different purpose to that allocated in the planning consent, and the newly proposed development is going through its own planning application which has already taken a year with no decision imminent. The newly proposed development will adversely impact our properties and owners who are currently marketing their properties have been unable to sell. Residents have asked the developer to withdraw from the sale and they have refused.
While I understand that you would need more details, I wondered if it was possible that the purchasers would have a case against the developer for not meeting the commitment set out in the information sheet, receiving an enforcement notice, and failing to notify us when that situation arose?
Thank you for your comment.
We are sorry to say it probably is a little bit too specific for us to provide a response on our website.
However, in terms of general guidance, the basic position is that, subject to the terms agreed, if the seller has represented as a matter of fact that they would or would not do something and you relied on this representation when entering into the contract, if it has caused you some loss or damage, there may be a claim.
Much would probably turn on the extent to which it could be said that the subsequent decision made by the developer was something that could be reasonably implied by an objective buyer to be something that they would not do. This might be difficult to prove.
We purchased an auction in Scotland unseen in March 2023. The auction house emailed us that seller stated only 5 things need to be fixed to pass council inspection. We went thru the purchase process. After we got in the house, we found the house is a mess and lots of DIY errors. We contacted the council and obtained a list, it turned out was a long list, not only 5 items, and expired. We are now forced to come up with money to fix the house and to pass the council inspection. Can we get compensation from the seller? Thank you.
Thank you for your comment.
Scottish law is different to the law of England and Wales. Whilst there are probably comparisons, we cannot offer even general advice on Scottish law.
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.
Partner bought his house 9 years ago and neighbour is hated by the local community as he dumps furniture in the communal car park, steals parcels (companies leave them with him if people are out, and he then says he never got them), has been in and out of prison for assault and driving offences, and has drug dealers coming and going daily. If you move the furniture, you get a screw in your tyre etc. If you report to the police or social services, they say they can’t do anything, or he doesn’t answer the door to them. The community live in fear and it’s actually a very affluent area (this person is jobless but given the house and a huge allowance as part of a trust fund.
Partner said he spent money on solicitors when he first moved there to look into sueing seller, but it didn’t sound possible. He’s worried he’ll lose a lot of money when it comes to selling.
Thank you for your comment.
The situation sounds awful and we are sorry to hear of this.
In short, if exchange or completion took place more than 6 years ago, the prospect of you being able to pursue the seller for any misrepresentation claim is quite low. Certain limitation periods apply to certain claims. After a certain period of time, they cannot be legally pursued.
As for selling the property, there is no duty on a seller to volunteer information or indeed answer any specific questions about the property. However, the practical effect of this is that the buyer might be reluctant to proceed. Would you proceed if you asked a seller if there were any reasons to believe that a dispute in relation to the property might arise but the seller refused to answer the question?
The only requirement, to avoid a possible potential misrepresentation claim against you as a seller, is that you are crystal clear and open about the information you provide. If you have explained something in a way that is not misleading and the buyer proceeds, it cannot be said that seller has caused the buyer a loss. The buyer knew the situation, it was described in factually accurate terms and the buyer chose to proceed. If the buyer suffers a loss, this was their choice.
We are not aware of any situation where it would be acceptable to mislead a buyer about something. The only thing the seller could do is say nothing or not answer the question. This is not misleading as the buyer knew as much before as they did after the unanswered question was asked. The buyer did not “change their position” based on the absence of an answer to the question.
Hi,
Can you help.
I purchased a flat that stated there was storage heaters, however, the heaters we’re electric and not storage heaters. The cost of replacing 4 heaters back to storage heaters is around £2500. The seller has said that this is something my survey should have picked up, however, I didn’t check the survey as on the fixtures and fittings form it stated storage heating. This is important in an apartment as there is no access to gas and electricity is the only form of heating. This means that the cost of running the flat is more than anticipated. If this had been identified, I would have factored this into my offer. Please could you advise whether I have a legitimate claim with the small claims court.
Thank you for your comment.
We cannot say whether or not you have a legitimate claim without considering the evidence in detail and would not be able to advise on our website in any event. We would need to consider the contractual position along with the relevant evidence, which may of course be limited to just the description of the heaters that you were given. In all likelihood the issue would turn on what a Court would consider was intended to be asked and conveyed by the question about the heating i.e. was it intended and reasonable to believe that the seller’s description of the heaters was as you believed it to be. Also, it may be relevant whether or not you inspected the property and looked at the heaters.
The cost of replacing them may also not necessarily be the same as the loss you have suffered. Normally, the loss would be based on diminution in value. This is the difference between what the property was worth and what someone would pay for it knowing about the issue. We would have to rely on input from a suitably qualified surveyor to tell us what that difference in price would be.
Hi,
I have purchased a property however the seller has breached the TA6 and TA10 form.
1. They left two rooms without a light bulb which was left in an unsafe condition – the property is in Leicester and I’m from London
2. Not provided a key for the garage door yet they’ve ticked all keys to doors and windows will be provided.
3. Have not left the property in a clean condition – they’ve claimed they had a professional cleaner to clean the house however I have proof it was not left in a good state.
All three points were ticked on the form.
I have claimed a total of £77.46 however they are not willing to pay it.
These are the reasons why:
As previously advised the Garage was not sold with a key our client never had one when purchasing the property herself
It is also not a legal requirement to clean a property, however, our client did confirm the property was cleaned and hoovered and had a professional cleaner to clean the kitchen cupboards.
The solicitor we both use was the same to make the process quicker however I feel there was no support on my side at all.
Do I have a legitimate claim here?
Thank you for your comment.
We cannot give specific advice on our website, only general guidance.
If something was said in the property information forms that the buyer relied on when entering into the contract to purchase the property, and what was said was factually untrue, then there may be a claim for misrepresentation.
However, in any sort of litigation, proportionality is a key aspect of any matter. Put in the most blunt of terms (and we genuinely do not mean to cause offence), whilst the legal system does exist to compensate aggrieved individuals, for the sake of £77.46 we would question how wise it would be to commence any sort of claim. A broken lightbulb that has (presumably) not caused any damage, a change of a lock and an argument about what is or is not a clean and tidy state is unlikely to be worth pursuing.
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.