Purchasing a property is a major investment for many people, often leading to ownership of a lifetime family home, or a property as a valuable long-term investment. For any buyer, it is therefore important to be aware of any property defects or issues relating to the property before making any financial commitment to purchasing the property.
Katie Lofthouse, solicitor at Woodcocks Haworth & Nuttall Solicitors, outlines a property buyer’s rights should a property defect be concealed by the seller during the purchasing process.
What sort of information should be disclosed by the seller?
During the conveyancing process, the buyer will ask the seller questions about the property which is normally completed using a Property Information Form (TA6).
The form comprises an extensive list of questions, including questions regarding the property boundaries, any previous disputes or complaints regarding the property, alterations and defects such as damp, as well as relevant environmental matters such as flooding and subsidence. It also includes requesting information regarding planning applications relating to the property and any notices and proposals that may affect the property or nearby properties.
The seller is expected to complete the form to the best of their knowledge and ensure to provide all supporting evidence held in relation to the property.
Where the seller has answered a question on the form or during negotiations incorrectly and the buyer later discovers the information to be inaccurate, the buyer could potentially make a compensation claim for misrepresentation or refuse to complete the purchase.
How are property defects usually withheld by the seller?
False statements made by the seller regarding the property may be made innocently, negligently, or fraudulently.
A fraudulent statement is when a seller withholds any defects in the provided information knowing that is not the case. A negligent misrepresentation is when a seller may provide an inaccurate statement or perhaps does not clearly state a particular defect.
In law, misrepresentation is defined as a false statement of a material fact made by one party which affects the other party’s decision in agreeing to a contract. In the case of purchasing a property that is found to have a defect, the remedies available to the buyer for fraudulent or negligent misrepresentation are rescission and compensation for damages. For innocent misrepresentation the court has the discretion to award either damages or rescission.
Taking further action regarding undisclosed property defects
The rule ‘caveat emptor’ (Buyer Beware) still applies when selling a property, so it is generally up to the buyer to make their own enquires, conduct any surveys and ensure a TA6 form is completed.
If the buyer has not made any effort to find out further information from the seller, they are in a weaker position to seek compensation if they later discover problems with the property. It is the buyer’s responsibility to make appropriate enquiries and ask the necessary questions to satisfy themselves regarding any concerns they may have about the property.
If a defect emerges during the exchange of contracts before completion, the buyer may be in a position to proceed with the sale and request a reduction in the selling price or for suitable damages to be paid.
In some cases, proceedings may entitle the buyer to bring a claim for damages against the seller or to potentially withdraw from the contract and claim their money back and return the property to the seller. In these circumstances, it is advisable to discuss the issue with a property solicitor to establish whether there is a case for compensation.
It is extremely important that every buyer remains ‘Buyer Beware’ when looking to purchase a property and to make sure that every angle of questioning is covered with the seller to ensure that issues or defects regarding the property are fully disclosed before the completion of the sale. This will hopefully avoid any issues regarding the property after the sale is completed.
It is advisable to seek legal advice at the earliest stage of negotiations, to avoid sometimes very complex, future disputes.
Katie Lofthouse is a solicitor based in WHN Solicitor’s Bury office. She helps people with a range of litigation issues from residential landlord and tenant disputes to debt recovery. To contact Katie call her on 01200 408 303 or email Katie at katie.lofthouse@whnsolicitors.co.uk
