416 thoughts on “My Seller Lied To Me! When Is It Property Misrepresentation?”
We noticed a small damp patch in a bedroom before we bought a new build house. We raised the issue with the sellers, and asked them dirctly if it was damp. They said it was simply ‘wet paint’ from snagging done earlier that day. Content with their answer, we bought the house. Two weeks later, the patch re-appeared after rainfall, and has now grown much much worse. Turns out there is major structural issues with the roof. Even worse, the new build warranty will not cover the cost of the work because there is an exclusion in relation to ‘Prior Knowledge’ which states: ‘Anything which would constitute a valid claim under the policy and about which the policyholder was aware prior to purchasing the Housing Unit’. Because we raised it as a potential issue before purchase, we have no claim. Is this a possible case of misrepresentation?
We are sorry to hear about this, which must be extremely frustrating and disappointing. From a misrepresentation point of view, this is presently difficult to advise you on. A lot of new build developers use their own terms and conditions or heavily amend the standard conditions of sale. On the assumption that some of the relevant standard contractual clauses were incorporated into your contract, then all representations, unless made in writing, would be contractually excluded from it. This would prevent them becoming contractual terms or amounting to misrepresentations. The reason for this is so that both parties can point to a single document as evidence to what terms were agreed between them. I cannot imagine that the developer would have excluded terms to this effect. If something has been put in writing during the course of negotiations, then there may be better scope to argue misrepresentation. The exception to this if the representation was made fraudulently or recklessly. Fraud is very difficult to prove, as it effectively requires proving that there was a deliberate attempt to mislead. As for recklessness, this is not as difficult as fraud to prove but will turn on whether or not the statement made was done so recklessly. To what extent was the person with whom you spoke justified in explaining it was wet paint? It may very well have been a reasonable assessment to make, painting having taken place that day. If you had a survey undertaken, you might have some scope to claim that your surveyor was negligent in failing to advise you of any defects. Professional negligence claims against surveyors turn heavily on the scope of their instructions and contractual terms and conditions. Have you spoken with your insurers already? If not, we would suggest doing so. Whilst obviously you were aware of a damp patch and were informed that it was just wet paint, whether or not this amounts to a material non-disclosure entitling them to decline cover is another matter. You believed that it was wet paint and had no notice that the cause was a structural defect. Even if your insurers decline to cover you, you might still have a claim against the developer. Under the Defective Premises Act 1972, a developer generally owes a duty of care to the purchaser to carry out the construction in a workmanlike/professional manner, using proper materials and ensuring that the property is fit for habitation once completed. You would probably need expert evidence to identify the defect and cost the proposed remedial works to prove a breach of these obligations and the loss you have suffered. Whilst only general advice, we hope this is of some assistance. Do feel free to get in touch with us if you would like to explore the position further.
We have exchanged contracts and some new information has come to light, property has been converted to two semis from one large property, this has not been signed off by building control, council tax do not have it registered as such, there are no utilities even though seller said they were and just needed to be re connected. There is a dispute between neighbour and seller regarding boundary and no land registry or title deeds after 8 months. Our searches came back to say we are on mains drainage it now looks like we are on a shared septic tank, which the seller has not looked after for a long period of time, new regs for 2020 suggest this could need a complete replacement at a substantial cost. The seller demolished a room of the property without proper consultation with us after exchange leaving a wall with doorway open to the elements which has resulted in water damage. There is still a charge on the property and neighbours have said that on their part was not lifted after their completion, obviously this is extreamly concerning for us. This is a total mess. Whats our next step?
We are very sorry to hear of these difficulties, which sound very stressful indeed. You have mentioned quite a number of potential issues, some of which should have been addressed prior to exchange. Some of the points you mentioned would not ordinarily give rise to concern, for example the charge you mention would ordinarily be redeemed on completion and the seller’s solicitor would normally provide an undertaking to do this.
We can really only provide some broad opinion on the position and in short, there may be elements of misrepresentation here. You may also a contractual remedy under the standard conditions of sale if any statement in the contract or negotiations leading to it were inaccurate. If completion has not yet taken place and the error or omission is as a result of fraud or recklessness or you would be obliged to accept a property which differs significantly from what the error or omission led you to believe, then you may be able to rescind the contract. Rescission is effectively a cancellation of the contract of sale. This is a fairly extreme remedy and does not happen in practice very often. A claim for damages is normally the route to be undertaken and it may be the case that some negotiation can take place prior to completion to agree a variation of the contract to reduce the purchase price to settle the potential claims.
We may be able to assist you but your first port of call is certainly to raise your concerns with your solicitor and obtain advice.
Hi, we have just moved into our new house and on having the cooker installed our electrician has major concerns about recent additions to the electrical system that are unsafe. He has condemned the electrical system and has said it will cost £4k to test and redo. Our buyers stated on the Property Form that there had been no electrical work since 2006 and therefore no certificates. It is clear now that there have been fairly extensive substandard electrical installations carried out right until recently. would we have any recourse, we just would like the electrics done as we hve young children but do not have the money to pay for it?
You may have a claim here but for two reasons, you might have some difficulty pursuing it.
The first reason is one of evidence. Whilst your electrician seems to say that works were carried out recently, some better evidence of this would be required. A misrepresentation does not occur unless what someone says is a “false statement of fact”. If you cannot prove the works were carried out after 2006 (or 2005, as the property information form asks), your claim is unlikely to be successful as the statement made would likely to be found to be factually true.
The second reason is the fact that you appear to have accepted the risk that there were no installation certificates, irrespective of when any works were carried out. It is possible for claimants to contribute to their own loss by doing or not doing something. Sometimes, a person can cause their own loss entirely, reducing their damages to nothing. Sometimes that act or omission may break what is called “the chain of causation”, effectively meaning that this act or omission was the cause of the loss.
It is not possible to predict what the outcome of any case would be. We also have to qualify what we say here on the basis that we are unable to give legal advice on this forum and would not be able to provide more conclusive advice to a client without a better idea of the facts of the case. However, from what you have written, we can see a reasonable argument to say that armed with the knowledge that there were no installation certificates (because you believed that there weren’t any, because the works were completed before 2005 when they were not required), it was up to you to decide whether to accept the risk that the works were not compliant with legislation, withdraw from the transaction or seek some sort of agreement with the seller about what to do. It is possible that a Court might ultimately decide that you accepted the risk and proceeded with the transaction in light of this, which cannot be said to be the seller’s “fault”.
Further, for a claim of misrepresentation to exist, there must be reliance on the false statement of fact. It does not have to be the sole inducement to enter into the contract, but it must have contributed to the decision. The Court will consider whether the true facts and those as represented would have induced a reasonable person into the contract. We see there being a possible argument that you would have proceeded with the purchase anyway, and therefore did not rely on the statement. If the position that the seller adopts is that the statement was substantially correct, in terms of the fact that no installation certificates existed (either because the works pre-dated this requirement or they were not professionally undertaken), this may provide a reasonable defence to the seller, which the seller could use in addition to the points on contributory loss above.
We are sorry that we cannot provide more positive news, but if you did want to consider your matter in more detail with us, please feel free to get in touch and we can advise you of any fees we will charge to assist further.
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We noticed a small damp patch in a bedroom before we bought a new build house. We raised the issue with the sellers, and asked them dirctly if it was damp. They said it was simply ‘wet paint’ from snagging done earlier that day. Content with their answer, we bought the house. Two weeks later, the patch re-appeared after rainfall, and has now grown much much worse. Turns out there is major structural issues with the roof.
Even worse, the new build warranty will not cover the cost of the work because there is an exclusion in relation to ‘Prior Knowledge’ which states: ‘Anything which would constitute a valid claim under the policy and about which the policyholder was aware prior to purchasing the Housing Unit’. Because we raised it as a potential issue before purchase, we have no claim.
Is this a possible case of misrepresentation?
We are sorry to hear about this, which must be extremely frustrating and disappointing.
From a misrepresentation point of view, this is presently difficult to advise you on. A lot of new build developers use their own terms and conditions or heavily amend the standard conditions of sale. On the assumption that some of the relevant standard contractual clauses were incorporated into your contract, then all representations, unless made in writing, would be contractually excluded from it. This would prevent them becoming contractual terms or amounting to misrepresentations. The reason for this is so that both parties can point to a single document as evidence to what terms were agreed between them. I cannot imagine that the developer would have excluded terms to this effect. If something has been put in writing during the course of negotiations, then there may be better scope to argue misrepresentation.
The exception to this if the representation was made fraudulently or recklessly. Fraud is very difficult to prove, as it effectively requires proving that there was a deliberate attempt to mislead. As for recklessness, this is not as difficult as fraud to prove but will turn on whether or not the statement made was done so recklessly. To what extent was the person with whom you spoke justified in explaining it was wet paint? It may very well have been a reasonable assessment to make, painting having taken place that day.
If you had a survey undertaken, you might have some scope to claim that your surveyor was negligent in failing to advise you of any defects. Professional negligence claims against surveyors turn heavily on the scope of their instructions and contractual terms and conditions.
Have you spoken with your insurers already? If not, we would suggest doing so. Whilst obviously you were aware of a damp patch and were informed that it was just wet paint, whether or not this amounts to a material non-disclosure entitling them to decline cover is another matter. You believed that it was wet paint and had no notice that the cause was a structural defect.
Even if your insurers decline to cover you, you might still have a claim against the developer. Under the Defective Premises Act 1972, a developer generally owes a duty of care to the purchaser to carry out the construction in a workmanlike/professional manner, using proper materials and ensuring that the property is fit for habitation once completed. You would probably need expert evidence to identify the defect and cost the proposed remedial works to prove a breach of these obligations and the loss you have suffered.
Whilst only general advice, we hope this is of some assistance. Do feel free to get in touch with us if you would like to explore the position further.
We have exchanged contracts and some new information has come to light, property has been converted to two semis from one large property, this has not been signed off by building control, council tax do not have it registered as such, there are no utilities even though seller said they were and just needed to be re connected. There is a dispute between neighbour and seller regarding boundary and no land registry or title deeds after 8 months. Our searches came back to say we are on mains drainage it now looks like we are on a shared septic tank, which the seller has not looked after for a long period of time, new regs for 2020 suggest this could need a complete replacement at a substantial cost. The seller demolished a room of the property without proper consultation with us after exchange leaving a wall with doorway open to the elements which has resulted in water damage. There is still a charge on the property and neighbours have said that on their part was not lifted after their completion, obviously this is extreamly concerning for us.
This is a total mess.
Whats our next step?
We are very sorry to hear of these difficulties, which sound very stressful indeed. You have mentioned quite a number of potential issues, some of which should have been addressed prior to exchange. Some of the points you mentioned would not ordinarily give rise to concern, for example the charge you mention would ordinarily be redeemed on completion and the seller’s solicitor would normally provide an undertaking to do this.
We can really only provide some broad opinion on the position and in short, there may be elements of misrepresentation here. You may also a contractual remedy under the standard conditions of sale if any statement in the contract or negotiations leading to it were inaccurate. If completion has not yet taken place and the error or omission is as a result of fraud or recklessness or you would be obliged to accept a property which differs significantly from what the error or omission led you to believe, then you may be able to rescind the contract. Rescission is effectively a cancellation of the contract of sale. This is a fairly extreme remedy and does not happen in practice very often. A claim for damages is normally the route to be undertaken and it may be the case that some negotiation can take place prior to completion to agree a variation of the contract to reduce the purchase price to settle the potential claims.
We may be able to assist you but your first port of call is certainly to raise your concerns with your solicitor and obtain advice.
Hi, we have just moved into our new house and on having the cooker installed our electrician has major concerns about recent additions to the electrical system that are unsafe. He has condemned the electrical system and has said it will cost £4k to test and redo. Our buyers stated on the Property Form that there had been no electrical work since 2006 and therefore no certificates. It is clear now that there have been fairly extensive substandard electrical installations carried out right until recently. would we have any recourse, we just would like the electrics done as we hve young children but do not have the money to pay for it?
You may have a claim here but for two reasons, you might have some difficulty pursuing it.
The first reason is one of evidence. Whilst your electrician seems to say that works were carried out recently, some better evidence of this would be required. A misrepresentation does not occur unless what someone says is a “false statement of fact”. If you cannot prove the works were carried out after 2006 (or 2005, as the property information form asks), your claim is unlikely to be successful as the statement made would likely to be found to be factually true.
The second reason is the fact that you appear to have accepted the risk that there were no installation certificates, irrespective of when any works were carried out. It is possible for claimants to contribute to their own loss by doing or not doing something. Sometimes, a person can cause their own loss entirely, reducing their damages to nothing. Sometimes that act or omission may break what is called “the chain of causation”, effectively meaning that this act or omission was the cause of the loss.
It is not possible to predict what the outcome of any case would be. We also have to qualify what we say here on the basis that we are unable to give legal advice on this forum and would not be able to provide more conclusive advice to a client without a better idea of the facts of the case. However, from what you have written, we can see a reasonable argument to say that armed with the knowledge that there were no installation certificates (because you believed that there weren’t any, because the works were completed before 2005 when they were not required), it was up to you to decide whether to accept the risk that the works were not compliant with legislation, withdraw from the transaction or seek some sort of agreement with the seller about what to do. It is possible that a Court might ultimately decide that you accepted the risk and proceeded with the transaction in light of this, which cannot be said to be the seller’s “fault”.
Further, for a claim of misrepresentation to exist, there must be reliance on the false statement of fact. It does not have to be the sole inducement to enter into the contract, but it must have contributed to the decision. The Court will consider whether the true facts and those as represented would have induced a reasonable person into the contract. We see there being a possible argument that you would have proceeded with the purchase anyway, and therefore did not rely on the statement. If the position that the seller adopts is that the statement was substantially correct, in terms of the fact that no installation certificates existed (either because the works pre-dated this requirement or they were not professionally undertaken), this may provide a reasonable defence to the seller, which the seller could use in addition to the points on contributory loss above.
We are sorry that we cannot provide more positive news, but if you did want to consider your matter in more detail with us, please feel free to get in touch and we can advise you of any fees we will charge to assist further.