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 is sold, 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 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 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. 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; 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 on our article “Property Misrepresentation in Practice”.

Misrepresentation is a false statement of fact which induces a party into a contract causing a financial loss. It does not have to be the sole inducement, but the buyer would have to have relied upon the statement to bring a claim.

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. In some cases, the buyer will be entitled to ‘rescind’ the contract. This means that the buyer is entitled to their money back and return the property to the seller. This does not happen very often and normally, a Court will 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, to make sure that their offer was accepted by the seller and because 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 later. All a seller can do is minimise the risk of this 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.

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 enquires 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 in the event that 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 the property and buyers should take all steps they consider appropriate to obtain the information that 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.

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 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.

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.

Questions people ask about misrepresentation

As you can see, buying and selling property is not always as simple as you think. We’ve tried to address some common questions below, but 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?

A seller does not have to volunteer information about a property. If a seller stays silent on something, a representation has not been made and a claim for misrepresentation can arise.

> 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 Property Misrepresentation Claims in Practice for a case on this point.

235 thoughts on “My Seller Lied To Me!”

  1. Hi – i have just moved into a property with a septic tank. The lady selling told us she had had the new tank installed 10 or 12 years earler and that it was a really enormous one. She couldn’t give it’s any documentation of the tank when we asked – she says she couldn’t find it but stressed the tank was absolutely enormous, and bigger than needed for a 5 bed home. We moved in and first thing we did was have the tank emptied and drained. Not only is it not draining – the drainage consultants commented on our being the smallest tank they had ever seen – that it’s absolutely a tiny and needs replaced completely. This will cost thousands. Do we have any chance of contesting this with or seller? As she didn’t give us the documents pertaining to the tank can we object? She made such a deal about how great the tank was it was one of the first things the estate agents mentioned when we viewed.

    1. Thank you for your comment. Ordinarily things said orally would not be actionable. The reason for this is the standard conditions of sale, which are normally incorporated into the sale of residential property, would exclude them.

      Having said this, there is normally a clause which states that fraudulent or reckless misrepresentations are actionable, whether made orally or in writing. Whilst it would be necessary to review the position in full before offering any advice, from what you have written, there may be some scope here to argue that there is a fraudulent or reckless misrepresentation on the basis that it was specifically said to you that the septic tank was suitable for the property and that transpires to be untrue.

      If you would like to consider the matter in more detail, please do feel free to get in touch.

  2. Hi – thank you so much for the info in this article. We have recently purchased a property and during the surveyor/conveyancing process we asked many times about the condition of the boiler. The seller did say that it was just out of its warranty period but that it ‘was working great’ – after our survey report came back he again verbally informed us that there was nothing to worry about. In the report, no specific mention was made of this particular problem below.

    We have just discovered that he had applied cellotape to a broken pipe under the boiler, where water has been leaking out since we moved in. We have just had a plumber informing us that doing this was very dangerous due to it being right next to the boiler. It’s taken us one month to discover this issue but god knows what could have happened if we hadn’t found it ourselves.

    The cost to fix the pipe is around £450 – is it possible that I would have a case here, and if so should I give the seller the option to make right before doing anything?

    1. Thank you for your comment. The standard conditions of sale generally incorporated into a contract to sell residential property specify that oral representations are not actionable. However, normally there is also a clause to say fraudulent or reckless misrepresentations are excluded from this.

      The effect is that if fraud can be proved, the fact that a representation was made orally as opposed to in writing can be actionable. In this matter it does appear that the seller had known that tape had been applied to the boiler and it may very well be the case that a fraudulent misrepresentation has occurred.

  3. Hi,
    I completed on a shared ownership flat on 30/jan/2019. At the end of that year I was notified by the housing association that there was an outstanding service charges arrears from 16/17. Immediately contacted by solicitor who shared the enquiries statement showing the statement of account from the housing association without the charge. The housing association explained it as an ‘admin error’. They are now threatening legal action against my non payment. There is no retainer for this issue as it was not disclosed as outstanding charges. Almost two years on and they’re still demanding I pay for this error which I think is their negligence and I’m now being forced to pay for. Please help.

    1. We cannot comment in any detail in relation to the issue between you and the landlord, as much would depend on what the service charges related to. Broadly speaking however, if there is an error on the part of the landlord, the First Tier Property Tribunal would generally absolve the landlord of some degree of liability and allow them to recover their service charges from the existing tenant. The reason for this is that as a matter of public policy, buildings with communal areas and the like do need to be managed and do need to be maintained. If a landlord was always unable to recover their service charges, it would lead to a situation where the landlord may go bust or otherwise not manage the property.

      There may be a claim against the seller on the basis of unjust enrichment as during their period of ownership their service charges were accrued. There is a possible misrepresentation issue here, as an innocent misrepresentation, ie one in which the seller genuinely believed to be the case, might still have arisen.

  4. Hi, I bought a house a couple weeks ago and I specially asked if noise such as talking, music, tv could be heard through the walls (from issues when I was in shared houses). The vendors advised that “I can confirm that I cannot hear a tv/radio/talking/music through the walls of the property”. However, having moved in I hear the neighbours children shouting and talking/tv. When I asked the question of the vendor, I referred to it as a “show stopper” question. Is there any potential come back as I would not have bought the house if I had known I would be hearing this all day long as I am very sensitive to noise? The vendors responses were confirmed in writing via the solicitors albeit I appreciate upon hindsight, the answer has been carefully worded to make it subjective.

    1. Thank you for your comment and we are sorry to hear of the situation.

      We are hesitant to say that there is a misrepresentation claim here. You are correct to identify that the response given to you was quite subjective. A statement of opinion, (ie that the seller could not hear anything) is not ordinarily actionable. Normally for a misrepresentation to occur it must be a statement of fact.

      Much will turn on how the question was asked and how the response was given in the context of the matter as a whole.

  5. Hi I bought a house as a 3 bed but have been informed that the 3 rd bedroom can not be classed as a bedroom have I been Miss sold

    1. Thank you for your comment.

      We are sorry to say that we cannot really provide any input on this, as insufficient information has been provided. We are unsure of why a bedroom could not be classed as a bedroom, or why the current or proposed use of a room in a property is relevant to the transaction in any way. Sometimes building regulations approval might not have been obtained in respect of a loft conversation intending to be a bedroom, but this doesn’t stop the seller using it as such, it just means that they are in breach of regulations, which is something that should be picked up on searches.

      We would hesitantly say that you contracted to purchase a particular property and probably viewed it. Therefore, semantic arguments relating to particular rooms and whether or not one in particular can be classed as a bedroom are probably not overly relevant. It would be for the prospective purchaser to decide whether or not the property was suitable for their needs.

      1. Hi mark thanks for the reply the bedroom is a attic conversion I have had to submit plans for another project on house and building control have told me that the attic cannot be classed as a bedroom when if we sell the house will we be able to class as a bedroom

        1. Thank you for your further comment.

          Whether or not this is a misrepresentation will depend on a number of factors. One of the important points is whether or not it was implicit or reasonable to assume in the response given to you included confirmation that any legal obligations incumbent on the seller to use the property in the way it was described to you had been complied with. We are not certain, based on case law, that this would be an actionable misrepresentation. The reason for this is that the property information form is designed to be answered and understood by a lay person who would not ordinarily have a legal background.

          Whether or not there is any basis for a professional negligence claim is another matter. A lack of building control certification might be something that your solicitors should have identified.

  6. We recently brought a property and moved in only to find a problem with silverfish … the previous owner is denying all knowledge but the neighbours also have them. Should she have mentioned this and can I claim against her ..

    1. Thank you for your comment, Amanda,

      Unless something specific was said about the issue, it is unlikely that there is a claim here. A purchaser must show that they have relied on a statement made by the seller which was untrue. If no such statement was made, there can be no reliance by the buyer and no claim for misrepresentation. The standard conditions of sale which are normally incorporated into the contract of sale expressly provide that the buyer takes the property in the condition that it is in. It is therefore up to the buyer to ask such questions as they might want the answers to before committing to the purchase. Questions about pest infestations do not appear on the standard property information form but perhaps additional enquiries were raised by your solicitor which dealt with the issue. The response to any of these enquiries would be important to consider.

  7. I recently bought a property with a basement. The seller informed me that the basement had previously been used as a gym and confirmed that there was no previous flooding to any part of the property or land on the property information form. Since moving in the basement has repeatedly flooded with any significant rainfall, up to 2-3 inches deep at times, with the water entering from a crack around what I now think is a floating basement floor. This was not picked up by the surveyor or on the flooding searches. Can I do anything about this?

    1. Thank you for your comment.

      If you have been expressly told in writing that there was no previous flooding of any part of the property but this is untrue and you relied on this statement when entering into the contract, then there may be a claim for misrepresentation. It appears to us that the starting point would likely be the need to obtain evidence that flooding during the previous owner’s period of occupation had occurred. It would be a potential defence to the claim for the previous owners to say that what they stated was true. As a potential claimant, it would be for you to prove that what was said was factually inaccurate. If that evidence is not readily available from other sources, it may be the case that an expert surveyor needs to be appointed to confirm whether or not previous flooding had occurred or might likely have occurred.

      As for any claim against the surveyor, much will depend on the terms of the retainer that you agreed with your surveyor. This would be a professional negligence matter and the starting point in determining whether or not there is any liability in this respect are the surveyor’s terms and conditions. Whether or not the surveyor should have identified the issue will depend on the factual circumstances and whether or not a reasonably competent surveyor would have identified the problem.

      In short, the answer to your question is that yes, there is quite possibly a claim against both the seller and the surveyor, but this is subject to evidence being available which may or may not also include the need to obtain expert input.

      We would be more than happy to look into the matter for you if you would like to get in touch.

  8. Hello, I purchased a house in October 2020, prior to buying the house I specifically asked the seller if there was or had been any problems with damp, the reply email was that the seller had no knowledge of damp, and no work had been done for damp. I knew the next door neighbour had been having problems so I had a damp inspector go into the property to do a report and he noted small amounts of damp and gave me a quote to fix it. I went back to the seller and they agreed to pay half of the costs. Upon collecting the keys and entering the property, the damp was a whole lot worse than originally noted. Upon speaking to the neighbour I’ve been informed that the walls have been ‘tanked’ twice by the seller as it wasn’t sorted the first time, and now, I’m left with a huge damp problem. The seller of the house had also paid half to have some work on the chimney with the neighbour prior to the house going on the market due to the damp issue affecting the neighbour. My most recent quote being £2500 as opposed to the £660 from the original damp inspector. Would this be classed as a misrepresentation case or would it be not due to half of the original repair costs being offered.
    Thank you

    1. Thank you for your comment.

      Put as simply as possible, you have likely been told something which is factually untrue and you relied on this when entering into the contract. In such cases a claim for misrepresentation may very well exist.

      From what you have written, it does appear that there is the possibility of a claim, irrespective of the fact that a damp inspector went into the property to look at it. If the damp inspector has not identified the problem properly, you may also have a concurrent negligence claim.

      If you would like to consider the matter further, please do feel free to get in touch.

  9. My husband and I bought a bungalow in 2018. The property next door has partial use as a children’s nursery, however after moving in we realised they do not follow any planning conditions imposed on them w.r.t garden use etc.
    We have also now found out that our seller had actively written to the council objecting the nursery’s planning applications and making planning violation complaints etc. The sellers lied on the SPIF and ticked ‘No’ to all the neighbour dispute questions, including the question about writing to the council about the property.
    Since we have moved in we have faced several problems and bullying from the nursery owners who wanted to acquire our property. We have lived through a campaign of abuse and harassment and have had to get solicitors to write to them.
    We are now fed up of being prisoners in our own home and had we known about these issues we would have obviously never purchased this property. Do we have any recourse?
    Many thanks for reading!

    1. The question of whether or not there is an existing dispute between a seller and their neighbours is a fairly subjective question. For an indication of how the Courts approach this question, McMeekin v Long [2003] is a good example and worth a read. We refer to it here.

      In short, if there was a dispute with a neighbour but you were told in the property information form that there was not, then you may have a claim for misrepresentation.

  10. We purchased a house in Sept 2020, the house has 6.8acres. There is a development site being built on the land to the east of the property – which we were aware of as it was already considerably underway at the time. The path leading up to a freestanding stable block bends slightly around towards this site, it like dog-legs off. It is all fenced off with fencing that has been there for some time however the developers are saying that this corner belongs to them. We are having a topo done to comfirm but the sellers sent us land plans over showing that that section of land was ours. We have also since found out and have proof of letters sent to the previous owners that they were informed of this by the developers. They did not disclose anything during the number of visits we had to the property and lied about the areas of land which belonged to the property. As mentioned, there is a free standing stable block on the land, we live in a conservation area so this should have had planning permission for – we have since found out that there was no permission for it. As we moved in the range cooker that they had left did not work – after being specifically asked if worked during one of our visits. There are many other small things also. We are wondering if we have a case against the previous owners in terms of the land being mis-sold? Also what would we gain from this – do they have to pay compensation?

    1. Thank you for your comment.

      If there was an error in a plan or document, meaning that what you purchased did not reflect what was agreed, then potentially compensation is available pursuant to the contract of sale. If you were actively led to believe that what you were purchasing differed from what you did purchase, there may be a claim for misrepresentation.

      Whether or not you wished to take such action is entirely your choice but what you would be awarded if your claim was successful would be damages to reflect the financial loss you had suffered.

  11. We offered on a property that was near a river. The Property Information Form was ticked ‘no’ to all questions asking if insurance (particularly in relation to flooding) had been refused, subject to high premiums etc. In addition under the relevant sections they stated that no third party had any access or rights of way and that there were no wires etc that crossed the property. In essence the answer was ‘no’ to all such questions. In addition the property had a holiday let within the grounds with a declared income of £25-30,000 pa. We proceeded through the conveyancing process as a result, incurring all the usual costs. 2 months through the process the vendors solicitor mentioned a substation within the grounds that had not previously been declared. We asked the vendor for details and they stated that it was a small box that they did not feel relevant, and that we would have to negotiate with the electricity company about access as there were no agreements. In addition a copy of their insurance policy (as requested by our solicitor) showed that they were excluded from flooding/flood damage and they have been unable to provide any verified documentation showing the holiday let income – just their own spreadsheets showing the income, which averages out at £21,000 a year gross, not the level stated. We contacted the utility company who confirmed the substation is an 11,000kw substation supplying the whole area and as such is a critical supply for which they need unrestricted 24 hour access. They stated there was an Easement in place which detailed the access of routes of access through the garden etc but were unable to provide it as we were not the householders. They confirmed the householders would have a copy of the Easement and could get a copy if required. We have now gone back to the vendors that we would not have offered the amount we did if we knew about the flood insurance exclusions or the substation and rights of access through the garden and said that were were happy to proceed but did need details of the Easement and would like a price reduction to reflect the future saleability and lack of being able to secure the garden with gated access and use the area in question. The agent has come back to confirm that the vendor feels that neither the insurance restrictions or substation should have any affect on the value or saleability of the house and so are withdrawing from our sale and have been instructed to remarket it.
    The question to you, and I apologise this has been longwinded, is that we only committed to the various costs of conveyancing on the basis of the answers given in the Property Information form. If any of the questions on the form had been answered truthfully we would have withdrawn. These answers are now shown to be incorrect and they wilfully answered them untruthfully. Can we now claim for the costs incurred such as solicitors fees, searches, mortgage application as they would not have been incurred if we had not been mislead?

    1. Thank you for your comment.

      We are afraid that it is unlikely that you would have any success in recovering your pre-contract expenditure. Until contracts are exchanged, there is no legally binding agreement between the parties to breach.

  12. I entered an auction contract under a negligent/fraudulent statement. I have paid a 10% deposit.
    The auctioneer did not disclose that the property is a unconventional construction.
    It is now reported that the property is constructed unconventionally (Hawksley P.R.C).
    Please let me know whether it is possible to claim mispresentation in this case.

    1. Thank you for your comment.

      It would not ordinarily be down to a seller to provide any information about a property, including whether or not it is of an unconventional construction. It would normally be for a buyer to take steps to satisfy themselves before bidding and/or accept the risk in proceeding in the absence of such information.

      For a misrepresentation case to exist the seller must have actively mislead the buyer. It would be a very rare case that this would occur where there has been no specific representation made. In this matter, the representation would need to be to suggest expressly, or be sufficiently misleading that that the implication, was that the property was of a standard construction. In the absence of this, there is unlikely to be a claim for misrepresentation.

      If you would like us to look into the position in more detail for you, please feel free to get in touch.

  13. My partner and I recently bought a house with a rear extension which had been built without planning or building control over a decade ago. This was declared and indemnity insurance had been bought by the seller. What wasn’t picked up by the surveyor or us was that the extension had started to subside. The seller had covered small cracks with filler and repainted. Was is this fraudulent and could we make a claim.

    1. There is no obligation on a seller to provide any information about a property. It is down to a buyer’s surveyor to identify structural problems.

      However, if the seller was aware of the subsidence but expressly suggested that this was not occurring, then this would likely be a misrepresentation. It would be necessary to identify a false statement of fact relating to the point before a claim for misrepresentation would arise. Normally, representations are made in writing during the course of the transaction and in response to enquiries made by the seller.

      It is more likely that you have a professional negligence claim against your surveyor. However, this would depend on the scope of their instructions. This is what they said they were going to do and the limitations on this contained in their terms and conditions.

      You should certainly contact your buildings insurer about the position. However, if you would like to explore the position in more detail, do get in touch.

Leave a Reply

Your email address will not be published. Required fields are marked *

I accept the Privacy Policy * for Click to select the duration you give consent until.