Misrepresentation In Property Sales: the consequences of not telling the truth when selling property
Buying property is a big investment for anyone, so it’s only right that the purchaser should be satisfied with what they are buying.
Likewise, the seller should be entitled to some comfort in knowing that once their property transactions are completed, that is the end of the matter.
The Seller’s Property Information Form
During the conveyancing process, the buyer will ask the seller questions about their property. These are called pre-contract enquiries and requisitions on title. As part of the process of selling a property, the seller will normally complete a Property Information Form. Much of the time, the form used is the Law Society’s Property Information Form, sometimes referred to as the Seller’s Property Information Form.
The idea behind this process is that the buyer satisfies themselves by asking the seller relevant questions and the seller answers them. If a seller answers an enquiry inaccurately or incorrectly, it can lead to significant legal implications for both parties. If the seller has been as upfront as possible in response to those questions, the seller cannot normally be held liable for anything else they say.
What happens if the seller’s information is not accurate?
We see a lot of cases where a seller, sometimes unintentionally but sometimes deliberately, misleads a buyer by answering a question on the Seller’s Property Information Form or during negotiations incorrectly – or partly incorrectly – so as to create a misleading impression. Property misrepresentation occurs when sellers provide false or misleading information about their property during a sale. The buyer then purchases the property and moves in, only to discover that the information provided by the seller was inaccurate.
We have dealt with cases where a seller has:
- failed to disclose existing disputes with neighbours;
- suggested that a property does not suffer from a flooding issue when it does;
- inaccurately maintained that the property does not suffer from Japanese knotweed when it does;
- stated that the boundaries are in one place or have not moved when in fact they are not or have been changed;
- suggested that the property does not suffer from damp, when it does;
- explained something in relation to an existing tenant which is incorrect;
- declared that no restrictive covenants apply to a property when they do; and
- stated that there are no planning or other proposals nearby which could have an effect on the property.
… the list goes on.
In all of these cases, the buyer may very well have a claim for misrepresentation, depending on what the seller said about the position.
If you are interested to read about real cases which have been decided by the Courts, examples can be found in our article Property Misrepresentation in Practice.
The importance of reliance
Misrepresentation is a false statement of fact that a party relies on when entering into a contract causing a financial loss. Innocent misrepresentation occurs when a seller provides incorrect information without any intention to deceive, which can still cause issues for the buyer. It does not have to be the sole inducement, but the buyer would have to have relied upon the statement to bring a claim. Read more about reliance in misrepresentation claims here.
Depending on whether or not the seller innocently, negligently or fraudulently answered the questions inaccurately in the Property Information Form, the buyer may be entitled to claim damages from the seller if they relied on the information when going ahead with their purchase.
In some cases, the buyer will be entitled to ‘rescind’ the contract. This means that the buyer is entitled to their money back and to return the property to the seller. This does not happen very often and a Court will normally award only damages.
Normally the measure of damages awarded to a buyer is based on ‘diminution in value‘, or the difference between what a buyer would have paid for the property knowing about the issue, and what they actually did pay for it. This may not necessarily reflect the actual cost to the buyer in rectifying the issue. However, in some cases, additional damages can be awarded to cover other expenses incurred.
Diminution in value
To give an example of how diminution in value is calculated, we have acted for insurers in professional negligence claims against surveyors, who have failed to identify that a property suffered from subsidence. The measure of damages was based on diminution in value. The cost to the buyer in underpinning the property to stop the subsidence was greater than the actual loss suffered. This is because the property was situated in a highly sought-after location with a large rental market, meaning that the impact on the value of the property was less.
Based on the fact that a hypothetical purchaser would have seen the property as an investment opportunity that could provide a return by renting it to tenants, rather than considering it a family home for life, the expert’s opinion was that a hypothetical purchaser would have been more likely to negotiate a smaller reduction in the purchase price than the full cost of the repairs. This would ensure that the seller accepted their offer, and even with the defect, the property represented a good investment.
How can a seller ensure that their buyer will not bring a claim for misrepresentation against them?
Sadly there is no way to be 100% certain that a buyer may not make a claim after a sale. Negligent misrepresentation occurs when a seller or their agent carelessly provides false information about a property, leading to potential legal claims. All a seller can do is minimise the risk as much as possible.
Although completing the Seller’s Property Information Form is not mandatory, it is unlikely that a buyer will proceed with the purchase if their questions are not answered.
Therefore when completing the Seller’s Property Information Form, the seller should answer questions as fully and honestly as possible. We often advise clients to think about what they would want to know about the property if they were buying it, and how they would react if they bought a house with problems that were not disclosed.
If a seller is not certain about an answer to a question in the Seller’s Property Information Form, they should think carefully about whether they want to answer it.
What happens if the seller’s replies were accurate at the time they were given to the buyer, but by the time of exchange the information has changed?
In some circumstances, a seller is under a continuing obligation to ensure that their replies to enquiries are accurate up to the date of exchange of contracts. Therefore if there is a change of circumstances meaning that the original statement is no longer accurate, there is every chance the seller would be obliged to update the buyer.
The Seller’s Property Information Form also specifically tells the seller that if something happens which would mean that their replies are no longer accurate, they should notify their solicitor of this, who should in turn notify the buyer’s solicitor.
If they don’t do this, the seller risks a potential claim against them for misrepresentation.
What if a seller knows something which is not specifically asked about by the buyer?
Have you bought a house with problems which were not disclosed? Unfortunately, this is unlikely to give rise to a claim for misrepresentation.
The basic position here is ‘caveat emptor’, or ‘buyer beware’. If a buyer does not ask the seller a question, they cannot then look to the seller for compensation if they discover something that they do not like about the property. It is up to the buyer to satisfy themselves that they want to purchase the property and ask questions about it which are important to them.
As the basic position in a property transaction is buyer beware, it follows that if no statement or answer is given by the seller, the buyer cannot be said to have relied on it to enter into the transaction.
Having said this, sometimes (but this is unlikely unless a special or fiduciary relationship exists) a misrepresentation can take place by a failure to mention something material to the transaction.
In some cases, a “half-truth” or explanation which is accurate on the face of it but misleading about the true circumstances of the matter can also amount to a misrepresentation.
The moral of the story
Sellers should be upfront about any issues that affect their property and buyers should take all steps they consider appropriate to obtain the information they want before committing to a purchase.
If a seller doesn’t know – or is unsure of – the answer to a buyer’s question, they should consider not answering the question. However, by not providing a response the seller could be putting their sale at risk, as the buyer may not be prepared to proceed without an answer.
Sometimes a seller will qualify their response, but this in itself is not always enough to prevent a claim. It is important to discuss it with your property solicitor, and to make sure the solicitor who is carrying out conveyancing on your property transaction has undertaken the correct conveyancing searches.
If you would like to read about real cases which have been decided by the Courts, examples can be found in our article “Property Misrepresentation Claims in Practice”.
If you are facing a claim for property misrepresentation or believe that you have a claim yourself, please do feel free to get in touch with us.
And if you are looking for a property solicitor to make sure your sale goes well from the outset, contact one of our specialist property solicitors in Braintree, Brighton, Chelmsford, Croydon, Hornchurch, Solihull, or Wickford.
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.
Try our new Property Misrepresentation Assessment service
If you think your seller withheld information about your property, you may be able to claim against them.
We now offer a fixed-fee service so that we can assess your claim. Have a look at Assess My Claim and see if we can help.
Questions people ask about misrepresentation
As you can see, buying and selling property is not always as simple as you think. Understanding your legal position is crucial when faced with potential misrepresentation in property transactions, and we’ve tried to address some common questions below.
However, if you are still unsure please feel free to contact us for an answer.
What is property misrepresentation and what are property misrepresentation claims?
There is no specific definition of this but broadly this could be described as a claim which arises by reason of a misrepresentation occurring during a property transaction.
Can I sue the seller if I bought a house with problems that were not disclosed?
Before you can issue a claim against the seller that you purchased your property from, you will need to identify a “cause of action”. A cause of action is a legal basis of a claim. This might be for breach of contract, depending on what was contractually agreed, or for misrepresentation, if the seller actively misled you about something. Also, it is important to understand that issuing a claim is expected to be an option of last resort. The Courts expect the parties to negotiate and follow sensible and sometimes prescribed pre-action conduct. If you feel that you might have a claim, you should always take legal advice before committing to litigation.
What compensation will I receive in a property misrepresentation claim?
Damages for all types of misrepresentation cases are intended to put the claimant in the position that they would have been in had the misrepresentation not been made.
In property misrepresentation cases, this is normally the difference between what you paid for the property and what it would have been worth, had the truth been told. This is called diminution in value.
What should a seller disclose when selling their property?
The seller does not have to disclose anything but if they do not, then a buyer might decide not to take the risk of buying the property.
Normally a seller will fill out a property information form. For residential purchases, the Law Society published a standard property information form for this purpose, called a TA6 or a TA7.
What if the seller lied on the property information form?
If a party to a contract deliberately misrepresented facts relating to the property with the intention of misleading the buyer, a fraudulent misrepresentation can arise. Often, such a representation does not need to be in writing.
Do I have to declare planning applications, like a neighbour’s extension?
There is case law on this and it will normally depend on whether or not you have received a formal planning notice.
Have a look at our article u003ca href=u0022https://cunningtons.co.uk/property-misrepresentation-claims/u0022u003eProperty Misrepresentation Claims in Practice for a case on this point.
Can a home buyer sue the seller?
If you have purchased a property from someone, and believe that they have not complied with the terms of the contract or have misled you about something when deciding whether or not to proceed, there may be a claim. It is, however, important to consider the basis of that claim before issuing it (i.e. suing the seller). Suing someone is considered by the Courts to be the option of last resort, and certain pre-action steps should be observed before committing to litigation. A solicitor will be able to consider the basis of your claim, the evidence in relation to it and advise you as to what you need to do.
My seller lied about flooding – what can I do?
In our experience, this is fairly common. In short, what can be done about this depends on the terms of the contract agreed with the seller and the extent to which the information that they provided to you was misleading and caused you to enter into the contract by reason of your reliance on it. If a seller has expressly stated “no”, the property has never flooded and it transpires that it has (and evidence of this would be important to locate), then there could be a claim against the seller.
Should my seller have disclosed an insurance claim?
A seller is not obliged to volunteer information about historical insurance claims to a buyer. However, much of the time, standard property information forms are used which ask the seller this question. There might be a claim for misrepresentation if an insurance claim was made historically by the seller has answered “no” to any question asked of them by the buyer which was aimed at understanding whether or not such insurance claims had been made. However, as most of the time, the measure of damages (this is the “compensation” that the Court would award) would be based on diminution in value, it is worth thinking carefully about whether or not it is financially worth a claim against your seller. For example, an insurance claim in relation to a fence that blew down in a storm is probably not going to have a major impact on the value of the property when compared to a claim for significant subsidence.
My seller didn’t disclose plumbing issues.
A seller is not obliged to volunteer information about issues with the plumbing to a buyer. There are some questions in standard property information forms which ask about things such as whether or not the boiler is in working order and whether or not the property or surrounding area has ever flooded. If there is evidence that the plumbing issue in question existed during the period of the seller’s ownership, and the seller has actively mislead the buyer by suggesting that such an issue did not exist (which is not the same as staying silent on the point), then there could be a misrepresentation claim.
Do you have to disclose mice when selling your house?
A seller is not obliged to volunteer information about vermin or other pest issues with a property. The basic position is that it is for the buyer (normally via their surveyor), to satisfy themselves that they want to purchase a property. If something in particular is important to a buyer, they should ask about this. If a seller is asked about any issues, they should provide an honest answer, or they could face a misrepresentation claim later.
How long are you liable after selling a house?
It depends on the basis of claim. For example, in a breach of contract claim, the basic deadline to pursue a claim would be six years from the date of the breach of contract (so normally, six years from completion). If the claim is based on misrepresentation, then the deadline would normally be (taking a conservative approach) six years from the date the contract was entered intro in reliance on the misrepresentations (so normally six years from exchange of contracts). There might also be other considerations to take account of. For example, fraud and deliberate concealment can have the effect of extending any deadlines to bring a claim. The Limitation Act 1980 sets out a number of “deadlines” to pursue certain types of claims and sometimes entire disputes turn on whether or not it can be said that the limitation period has expired or not.
Can you be sued after selling a house?
It depends on who is asking. If the question is can a seller be sued by a buyer, the answer is “yes”, a buyer can sue a seller of a property. Depending on the type of claim, there will be time limits to consider, however. Sometimes a seller can even remain liable to neighbours for breaches of restrictive covenants and other requirements they haver agreed to observe, but this is a complicated issue and does not arise that often.
I recently purchased a property, foolishly I didn’t get a survey report and after moving in I’ve noticed the decking boards are bouncy and some are rotten, I never went into the garden as it was raining on one occasion and another occasion the sellers son was out on his trampoline and I didn’t want to disturb him, I didn’t ask any question about the garden and the seller didn’t declare anything, what can I do?
Thank you for your comment.
It would generally be a standard condition of the contract of sale that the buyer accepts the property in the condition that it is in.
There is also a general principle of law, and the basic position in respect of the sale of property, of “buyer beware” or “caveat emptor” (for those that feel the need to use Latin). This means that it is up to the buyer to decide whether or not they have enough information to proceed with their purchase.
As a seller is under no general duty to disclose anything about their property to the prospective buyer (and does not even have to answer questions that they are asked about it if they don’t want to, but a buyer might get a bit suspicious if the seller doesn’t), if a buyer proceeds to purchase the property and discovers a problem after completion, there is not really any way to hold a seller liable for this. It was the buyer that decided that they had enough information and proceeded to enter into the contract to purchase the property. It was not the seller that misled the buyer or otherwise failed to provide something about the issue to the buyer pursuant to a particular duty to do so.
Much of the time, misrepresentations occur because of something which is factually inaccurate contained in the “standard” pre-contract documentation, like the Property Information Form (TA6), Leasehold Information Form (TA7) or in the replies to the buyer’s solicitor’s enquiries. Sometimes emails, text messages and even things said directly by the seller to the buyer are factually inaccurate and misleading. It is when the buyer relies on such inaccuracies provided by the seller when deciding to purchase the property on the terms proposed that a misrepresentation claim can arise. A buyer should have copies of these documents, as their solicitor should have provided them for the buyer’s consideration, as they are obviously going to have a huge impact on the buyer’s decision to proceed further (and if a solicitor has not supplied such things, the solicitor may have been negligent).
If you feel that you have been misled in this way, and have the documentation and information that you consider to be misleading, we are trialling a fixed-fee initial evaluation of such matters, the details of which can be found by clicking here.
Hi,
We have recently moved into our new home as of July 2024. A tradesman bought the house, done it all up and sold it on to us. He had done a good job by changing the EPC from an F to a B but we have many issues which I am concerned about.
Penetrating damp, linoleum floor lined directly onto concrete creating moisture all downstairs. Walls are un boarded and I plastered behind our kitchen cabinets creating mold… the kitchen is new and the house is stone.
I am on the verge of crying after discovering a false wall being installed in front of an exterior moist stone wall. A clearly wet wall behind another of which I only discovered as there is a stop cock there. We are having a lot of issues with mould.
These issues were not made prevalent to us as he “put a lot of effort in making the house better”. This effort seems half [hearted]!
Our neighbours told us the house had been previously flooded on purpose by the previous tenants to leave their tenancy agreement and been in a house fire… should the tradesman have shared this information with us? He would have known given the extent of the damage that would have been visible. I am now having to deal with the moisture that’s still trapped in the sandstone and mortar… I am going to have to pay to get the walls seen to, repaired, boarded and plastered correctly, without mentioning decoration.
He would have known about the flood as it is clear in the previous listing on zoopla. There’s water marks everywhere. He has installed an ASH pump and the radiators are like warm… meaning they don’t even warm up the walls or ventilate them as they should. I feel like this is a lesser of two evils. Not only is it good for the environment but I’m suffering as the house is not healing as it should.
Differently, a room upstairs is not plastered. It has plasterboard, a layer of what looks like foil. Then a white wallpaper on top and then a 3mm thick foam wallpaper with an adhesive foil back. There is fabric tape around plugs and questionable diy decisions made.
I keep finding wood lice in the bedrooms upstairs which is a sign of damp along with green mould on the skirtings. I am asthmatic and I hope this isn’t impacting my health.
He dressed up this house to make it look like he did a fantastic job. I find this deceiving and frankly withholding information. This explains why our insurance was so expensive and I am annoyed and upset by what I have found in the last month, let alone what else I have to find.
Is there anything I can do? I was a first time buyer and we paid £240,000 on a small semi 4 bed but given these issues, I don’t think it’s even worth £180,000. I am going to have to get all the walls seen to, including the wet wall with a false wall in front of it…, new flooring installed including a leveller, DPM, underlay. I haven’t been in the attic yet so I can’t wait for that. He’s already told me that these no insulation in one section and that it’s still open with our neighbours.
Thank you for your comment and we can appreciate how disappointing and upsetting these things can be.
The basic position is that a seller is not obliged to disclose anything about a property to a prospective buyer. It is up to the buyer to check matters and for this, they will often instruct a surveyor. If you instructed a surveyor, and it can be said that the surveyor failed in their duty of care to identify these issues (i.e. what the surveyor agreed to check for you would have included spotting any of these issues) then there may be a professional negligence claim against the surveyor.
This is not the first time we have seen this issue but, unless of the complaints you now have it can be said that the seller expressly (or at least very strongly implied) that they were not there, you may have some difficulty pursuing a claim, but it is not out of the question. The client that we previously acted for was informed that the property had been “fully refurbished”. Like you, the work was questionable at best. However, the issue would likely turn on two particular points. Was the representation that the property had been “done up” or “fully refurbished” merely a statement of opinion, rather than a statement of fact and if it was a statement of fact, meaning that it would make the claim actionable, did it imply a particular quality? On the one hand, it is probably fair to assume that a newly refurbished property had been completed to a good and acceptable standard (but of course, what that standard is also remains subjective to some degree). On the other hand, you can “do up” a property badly, but it is still “done up”, just not to a particularly good standard.
If you have evidence that the property had flooded during the seller’s period of ownership, and the answer in the standard property information form was “no”, then this would be a reasonably good example of a misrepresentation.
I live next to a small plot of land that the seller has been trying to sell as a buildable lot for 8 years. All offers have fallen apart after realizing it would be very risky to get all of the approvals due to the high water table and very strict septic rules (it is directly on the water). The property is on the market again, but the MLS listing shows that the property has been sold twice in the past 3 years for £140,000 and again for £280,000. These sales never occurred and the town records clearly show that the only purchase history is £40,000 in 2016. Is there any recourse we can take (beyond talking to the realtor) to have that listing reviewed for accuracy?
This is not really something we can advise upon, as it is a very novel query.
What we can say is that land changes hands “on paper” so to speak. In short, a seller will transfer the land to a buyer and the paperwork is then sent to the Land Registry to record the transaction and register the new owner. The Land Registry records data relating to the sales of registered land and it would probably be best to contact them, as they can tell you who has made the mistake with respect to their records.
Hi, My partner recently bought a grade 2 listed property from her local council at auction. We both went through the sellers pack carefully, all okay as far as that is concerned. However we have just discovered that the property was only in auction following two almost sales which the council lost when those potential buyers found out that it was actually a scheduled monument. The sellers pack neglected to say it was such, the council clearly knew and also clearly knew it was a big issue when coming to sell. We now realise that the property which needs work, which we were aware of and had costed taking into account the grade 2 listing, now is completely unaffordable, no doubt by an order of magnitude. And, of course this renders the property all but worthless. Any thoughts on this? Is there such a thing as fraud by omission?
Thank you for your comment.
We cannot provide specific advice on our website but can set out some general points which might be relevant considerations. Such guidance is not, however, a substitute for proper legal advice considered in the context of any particular case.
The basic position is that a seller is not under an obligation to disclose anything in particular about the property or even answer a buyer’s questions. Therefore not saying something does not amount to a misrepresentation, fraudulent or otherwise. The buyer cannot complain about being misled by the seller if nothing misleading was said by the seller for the buyer to rely on. If the buyer has relied on assumptions, then it is not the seller that has misled them.
Sometimes it is possible to base a misrepresentation claim on an omission, but there would generally also have to be something said by the seller to (in effect) create an obligation on the seller to set out the facts in full. What the seller says might have been perfectly true and accurate and, therefore of itself, not a misrepresentation. However, because of some fundamental fact or point that was omitted, it renders what the seller has said inaccurate and misleading.
By way of a simple example, it could be that a seller truthfully explains that the property benefits from a dedicated parking space and points to a terms in a lease which confirms that it legally does. However, the seller fails to point out that the parking space cannot be used because ownership of it is in dispute and someone else has blocked access to it, that it is damaged beyond repair and cannot be used again, or perhaps that using the parking space might be a breach of planning restrictions. Whilst just an illustration (and one that is probably open to some legal debate, as misrepresentations by omissions are complicated), it is all well and good to have the legal benefit of a parking space, but it does seem quite a fundamental point that it cannot be physically used.
You are right to mention “fraud” (in the civil, rather than criminal sense), as it is normally in a fraudulent misrepresentation matter that such points come up. A party to a contract might deliberately over embellish particular facts in an attempt to convince the other party to rely on what is being said and enter into the contract (as principles relating to misrepresentation apply to all contracts, not just the sale of land and real property). If they have deliberately omitted or supressed certain additional information which in effect renders what was actually said factually inaccurate, then there may be a claim. However, any claims involving fraud or deceit are often difficult evidentially, as proving the other party’s state of mind (i.e. that they knew they were misleading the aggrieved party) can be difficult.
Another “exception” to the rule regarding the fact that there is no obligation on seller to volunteer information about a property is the “duty” to disclose latent title defects. These are things such as rights of way or other rights over the property which cannot be discovered on reasonable inspection. It is questionable the extent to which Grade II listed status would be considered a latent title defect, especially since there are ways to discover if a property is listed or not. SPS Groundworks v Mahil [2022] is a relatively recent decision of the High Court. This case involved an overage agreement (a right over a property, which again was sold at auction) and it was held that as the seller was aware of it, the seller was “…bound to give the purchaser full, frank and fair information, or a fair and proper opportunity to gain such information, about any defect… Full and frank disclosure required the Overage Clause to be specifically brought to a potential purchaser’s attention by description in the particulars, addendum notice of the type produced at the second auction, or specific reference by the auctioneer.”
Hello we completed in June last year
We have now found out via a letter from solicitors that my freehold house is required to pay service charge to a resident run maintenance company.
I am still unsure if the maintenance company is real as the name has no relevance to the road we live on and have only ever received hand posted letters mentioning a management company that again the name has no relevance to our property. We was not told when we purchased that there was a management company and never received a share certificate or anything indicating this. We have just received a final demand before the solicitors take further action is there anything I can do ?
Many thanks in advance
Thank you for your comment.
Firstly, we would not put too much weight on the fact that a company name does not reflect what that company does or where it operates. There is generally no legal requirement that a residents management company must have a particular name that associates it with a particular property or estate. Check the Companies House website to find out details of the limited company, including who the directors of it are and who owns any significant beneficial share of it.
It sounds as though what you are talking about is a rentcharge of some sort. We are not certain that it could be anything else, especially if you have not entered into a direct contract with the company. We would need to consider the title documentation. The first thing to look at would be the transfer or TR1 that you signed. This might contain a provision that you covenant (“promise”) to pay the service charge to this company.
In some ways a rentcharge is a bit like a leasehold covenant (a ”requirement”, or “obligation”) on a lessee to pay a service charge to a management company in exchange for managing the communal parts of the property/estate. However, a rentcharge relates to freehold land and it is also not necessary for the rent owner (that is the person or entity entitled to the payment) to have a particular legal interest in the land.
Estate rentcharges are not hugely uncommon or necessarily unreasonable to have. Someone maintaining the communal gardens of the estate, or ensuring that pot holes in unadopted estate roads are patched up, for example, can add amenity value and benefit to the residents. However, other types of rentcharge can be problematic, especially for mortgage lenders.
The reason why mortgage lenders are not overly keen on rentcharges is because of the draconian enforcement measures that can be used if payment is not made. Some rentcharges impose no obligation on the rentowner to demand rent or even give notice if an intention to enforce their rights. One enforcement method that by law would normally be available to a rentowner is to create a lease over the freehold. If a lease is created over a freehold (which can even be sold on to a third party!), the freehold can lose value. If the freehold loses value, it might not be worth what the mortgage lender has secured against it. Put another way, the equity in the property might not be enough to pay off the mortgage if a leasehold interest is created over the freehold and the lender loses the value of its security over the property.
If it is a rentcharge that you are talking about, short of simply paying or trying to negotiate a variation of it (which the rentowner does not have to agree) there is generally little scope to legally challenge them.
Consequently, properties subject to rentcharges can therefore lose value on the basis that the market of buyers available for them is limited to cash buyers that are not concerned about the enforcement rights a rentowner may have. Often, during the conveyancing process, if a rentcharge is spotted, the buyers solicitor will try to get the seller to enter into a deed of variation, either excluding the ability to create a lease in default of payment or at least to give the lender notice of the intention to take such steps, so the lender can pay the arrears and add it to the mortgage without losing the value of its security.
We are surprised that this was not brought to your attention during the conveyancing process. If it is a rentcharge, alarm bells should have been ringing for the solicitor, as it should have been clear from the title documentation that one existed. Since the 2016 case of Robert’s v Lawton, which is an extreme example of what can happen if a rentcharge is not paid, the issue should have been in the radar of a coveyancing solicitor. Whilst a conveyancing solicitor cannot be expected to advise on how this might effect the value of the property (they are neither a surveyor nor do they have crystal balls, despite the expectations on them by some clients) they can at least identify the risk to their client that it might cause problems in the future.
In any event, it is generally unusual for a freehold property to have any obligations to pay anything to anyone. Generally, a positive covenant (that is a requirement to “do” something) would not pass to a new owner (although it is a little more complex than this, as the original owner that agreed to the requirement can normally still be pursued for a breach of it and then pursue the new owner). If it is the case that your solicitor should have spotted and advised you of the issue and did not, you may have a professional negligence claim against them.
Having spent a year in counselling due to domestic abuse, whilst supporting my own father who battled leukaemia and ultimately died an excruciatingly painful death which my brothers and I were by his side and all traumatised by. The same solicitors who were instructed to act for me in family law, also undertook conveyancing of my house move so they knew the stress I was under at the time. I moved to Glasgow and was told the flat was valued at 115k, I have documentary proof of this from the mortgage provider at the time, 2008. 6 months after I moved in locals told me I paid far, far too much. It appears other, similar 2 beds sold for 60-90k at the time, I paid 115k. Flats in the street are now selling for 120k some 15 years on. The estate agent who sold the flat to me at the time are now refusing to give a valuation in writing. Event though I have two 1st class degrees I’ve not been able to get a job in Glasgow. I feel like I was trafficked here, been held in destitute servitude on £368 a month UC, lied to and financially raped as I now can’t even afford to move back to the smallest houses on the cheapest side of the street I came from when I was told it was a like for like exchange. What action would you advise?
Thank you for contacting Cunningtons, we are sorry to hear of the difficulties you have experienced.
As you are resident in Scotland we would advise that you seek legal advice from a Scottish law firm who are qualified in that jurisdiction, to try and assist you.
Hi, Great article thankyou. I’m considering exploring this in relation to a property we purchased in April 2022. The sellers deliberately misled the surveyor by replastering walls heavily damaged by ongoing water ingress to the middle floor bedrooms with heavy duty plaster, that we have been informed by builders should only be used for ground floors and basements. In addition, they used heavy duty wallpaper on top of this plaster and painted it magnolia. It was only apparent after a few weeks of residing in the property that the wall was in fact wallpaper. Once removed, this revealed severe damage, which we have now discovered is due to a large structural crack in the building. Are we able to bring a claim of misrepresentation against the sellers?
Thank you for your comment.
There would generally have to be an actual factual representation made about the condition of the property for there to be an argument that the seller “misrepresented” that fact. “Concealing” defects in a property, when nothing is said about the defect in question, would be very unlikely to form the basis of a claim. Whilst arguably morally objectionable (at least to the buyer but from the seller’s point of view, they want/need to get the best price that they can and why should they not leave it to the buyer’s surveyor to check for problems?), it is not necessarily going to be enough to bring a successful claim.
There might be other factual misrepresentations that have been made which could be considered. For example, in the standard property information form (the TA6 – published by the Law Society), there is usually a question about insurance and whether or not any claims have been made. If there has been a structural problem and an insurance claim has been made, then there may be a misrepresentation if the seller said “no” to this.
Whether or not you have a professional negligence claim against your surveyor will depend on a number of factors. It is not uncommon for a surveyor to limit the scope of their retainer (this is the agreement between them and their client) to just matters which can be identified from a visible inspection. To a degree this is understandable, as a seller, you would not want a surveyor moving your belongings about, drilling, taking up carpet or otherwise performing invasive inspections. It is not uncommon for sellers to “hide” issues with their property by painting or papering over cracks and defects. Whether or not you should have been advised by your surveyor of such things to put you on notice of such a risk is questionable.