Property Misrepresentation Claims

As a potential homebuyer, it may surprise you that discovering what you are getting for your money lies squarely with you. Indeed, the seller is under no obligation to reveal if:

• the garden floods or the roof leaks;
• the floorboards are rotten;
• they are aware of subsidence;
• the electrics are dangerous;
• the property boundaries are in dispute, etc.

So, bringing such issues to light begins with three lines of enquiry:

• conveyancing searches;
• the property information form; and
• your survey.

Conveyancing searches

Conveyancing searches are enquiries made by your solicitor to various authorities in order to discover more information about the property.

Searches may uncover a host of surprising or even worrying information on your dream home, including whether it:

• floods regularly, making it difficult or impossible to insure.
• has an unstable mineshaft underneath or has debt attached.
• comes saddled with paying for repairs to the parish church (chancel repair liability) or is in an area affected by radon gas.
• sits on land previously used for industrial purposes and is now contaminated with, for example, asbestos, arsenic, solvents, or gases.
• has a new housing estate, road, wind farm, or factory planned close by, which may affect your enjoyment of the property and its value.

Property Information Form

Initially, all sellers complete the Law Society’s Property Information Form (Form TA6). The TA6 provides a potential buyer with more detailed information about the property. At sixteen pages long, with fourteen sections, it’s comprehensive, requesting information about the property and surrounding area within the seller’s knowledge. And the replies to the TA6 invariably form the basis of further enquiries to the seller as the transaction proceeds.

Significantly, every response to a question or enquiry amounts to a representation on the state of the property. If a seller answers dishonestly or inaccurately, they potentially open themselves to a claim for misrepresentation.

House survey

A buyer should always obtain a survey. However, as moving home is expensive, a survey is often low on a buyer’s list of priorities. Unfortunately, that may prove a false economy, given the substantial financial commitment involved in buying a property. Nevertheless, many buyers skip the survey or opt for a less expensive – but less thorough – version.

See: Types of survey when buying a house

Further enquiries

The information obtained from your searches, the TA6, and your survey often raises red flags. As a result, further information or clarification is sought from the seller after discussing those issues with your conveyancing solicitor. As with the Property Information Form, the seller must answer those enquiries honestly and accurately.

Seller lied on Property Information Form

However, it’s important to remember that a seller’s misleading reply is not necessarily deliberate. And unfortunately, in trying to be helpful, people sometimes feel the need to put at least something down or even take a guess. Accordingly, conveyancing solicitors should encourage sellers to seek clarification if they do not understand a question or know the answer.

Property misrepresentation claims

In legal terms, a misrepresentation is when one party to a contract makes a false or misleading statement to the other party to induce them to enter into that contract. So, in a property transaction, a misrepresentation occurs when a seller knowingly misrepresents any of their answers:

• on the TA6; or
• in response to further enquiries raised.

For example, you may ask the seller whether the property suffers from surface water flooding and receive an answer that it does not. However, after completion, you discover a nearby stream floods regularly, waterlogging the garden. And in relying on the seller’s misrepresentation, you have lost the opportunity to negotiate a lower purchase price or choose not to proceed.

Making a property misrepresentation claim

So, if you bought a house with undisclosed problems, you may have a claim against your seller for misrepresentation. But to make a claim, you will need evidence that they:

• answered an enquiry inaccurately; and
• prove it was more likely than not the seller was aware of the issue before you bought the property.

But even if you can prove misrepresentation, you must also prove you have suffered loss.

Negligent surveyor

Should your surveyor have highlighted the issue or defect? If so, your claim may be against your surveyor for professional negligence. Much depends on the nature of the problem and the type of survey. Remember, only with a more expensive full building survey will the surveyor look behind walls, under floors and above ceilings.