Property sales should be plain sailing, but can sometimes go wrong. Not telling the truth about some aspect of the sale can cause great upset, says Derek Inkpin from local solicitors Wiseman Lee
The word ‘misrepresentation’ simply means not telling the truth, and if a property seller fails to inform a buyer of a given situation, this can give rise to a substantial claim to compensate the buyer.
Part of the conveyancing process involves the seller completing a Property Information Form. If the seller has been truthful in response to the questions raised, this would not normally give rise to a claim, but if a misleading impression or wrongful information is given, the buyer can claim the expenses (sometimes substantial) in correcting the position.
Examples could include stating that:
- There have been no disputes with neighbours if untrue.
- The property does not suffer from a flooding issue, when it does.
- The property does not suffer from Japanese knotweed, when it does.
- The position of the boundaries have not been changed, when they have.
- The property does not suffer from damp, when it does.
These are some examples of how a buyer could be misled, and if the buyer relies on these inaccuracies to their detriment, financial consequences could result. The picture becomes blurred when it transpires that an incorrect ‘statement of fact’ is actually the seller’s opinion, and therefore no claim for misrepresentation will arise. However, if the seller’s opinion turns out to be untrue and was given recklessly, a claim could be made.
Take the well-known 1993 case of Sindall vs Cambridgeshire CC, where land was being sold for development. In answer to the question: “Is the seller aware of any rights affecting the property other than those which can be seen on inspection?” the seller’s answer was: “Not so far as the vendor is aware,” which the court found to mean the seller had effectively said: “I have checked but cannot find anything.” This was held to be a false statement of fact because a sewer ran underneath the land, which was not discovered until after completion of the purchase. If the buyer decided to keep the land, he could claim compensation for the cost of rerouting the sewer (assuming this to be possible) or could claim rescission of the contract whereby the seller must take back the property. Damages to compensate the buyer may also be awarded.
All this is at the court’s discretion. Sometimes, damages will only be awarded subject to exploring all circumstances of the case.
Wiseman Lee is located at 9–13 Cambridge Park, Wanstead, E11 2PU. For more information, call 020 8215 1000