What is property misrepresentation?
Legally, property misrepresentation occurs when a seller either withholds information or intentionally provides false details on the seller's property information form or in response to additional enquiries.
Bought a house with problems not disclosed
What happens if issues arise after purchasing a home? Discovering problems post-purchase doesn't automatically entitle you to sue the seller for non-disclosure. While it's common for sellers to complete a property information form (TA6), the onus is on you to raise enquiries, conduct a house survey, perform searches, and assess the property's condition. Your solicitor should provide guidance throughout this process.
If the seller is unaware of a problem and cannot answer your enquiries, they must acknowledge this and cannot be held accountable. If circumstances change and they obtain new information, they must inform you. A house survey should uncover hidden defects, but we'll address what to do if it fails to do so later in the article.
To make a property misrepresentation claim, you must demonstrate that the defect existed before the exchange of contracts and that the seller knowingly provided false information. In some instances, defects may arise after you've moved in, leaving you responsible for addressing them.
Duty of the seller
Unfortunately, there is no duty on the seller of a property to disclose any issues or defects with the property, voluntarily. A seller does however have a duty to answer all enquiries in relation to the property honestly and accurately. Standard enquiries are usually made by the seller being asked to complete the sellers property information form, which is a standard form produced by the Law Society. This asks a number of questions relating to the property and any issues relating to it and the surrounding area, that are within the knowledge of the seller. Your solicitor may also ask further specific enquiries throughout the course of the conveyancing process, which again, the seller has a duty to answer accurately and honestly.
Seller lied on property information form
So, what happens if a seller lies on the property information form in the UK or in response to specific enquiries?
In England and Wales, this can result in a claim for misrepresentation against the seller. The sellers property information form and replies to enquiries, form part of the contract between you and the seller. It is therefore a breach of that contract if they knowingly misrepresent any of the answers on the form and you then rely on those representations in purchasing the property. This is why property misrepresentation claims in the UK are sometimes made, because the buyer has lost out significantly due to the seller knowingly or failing to disclose certain issues when asked about them.
Our property dispute solicitors have acted for numerous clients who have found themselves in the situation where they bought a house and found problems after these should have been disclosed.
What are common examples of property misrepresentation?
Misrepresentation can encompass a broad spectrum of problems arising from inaccurate or false statements. Examples of the types of misrepresentations that we have seen in terms of problems with a house after completion in the UK include the following:
- Structural issues that require extensive remedial works
- Damp
- Disputes with the neighbours to the property
- Proposed planning in the area that could affect the value of the property
- The presence of Japanese Knotweed in the garden
The above list is by no means exhaustive and there can be a range of other issues that arise.
Bringing a claim for seller misrepresentation
If you wish to bring a claim against a seller for misrepresentation, you firstly have to show that they have answered an enquiry inaccurately or incorrectly and then you have to be able to prove that the seller was aware of the issue before you bought the property. The latter can sometimes be more difficult to prove and usually speaking with neighbours who may be willing to give a statement to support your case, can be very helpful evidence.
For example, if a seller didn’t disclose asbestos in their UK home before selling it, you will need to prove that they knew about the asbestos and knowingly failed to disclose this.
If you can prove your case, you may then have a claim against the seller to rescind the contract, which means to cancel the contract, return the property to them and you get back all that you have spent. If the issue is considered to be minor or capable of rectification however, the court may find that it is more proportionate for your claim to be one for damages to reflect either the cost of any remedial works or the diminution in the value of the property.
If you instructed a surveyor to assess the property before you purchased it, it is also important to consider (whether with or without a claim for potential misrepresentation in property transactions), if the surveyor ought to have noticed the issues with the property, in particular if they relate to the condition of the property. You may have a potential professional negligence claim against the surveyor also.
If you think you may have a claim for property misrepresentation and wish to discuss it with us, call our specialist team on 01616 966 229 or complete our online enquiry form.
Property misrepresentation FAQs
Can someone sue after buying a house in the UK?
Answering the question of whether someone can sue after buying a house if they feel that it was misrepresented, isn’t always straightforward. In England and Wales, a buyer may claim that the seller misrepresented the property or breached the sales agreement. The misrepresentation could be anything from known structural problems, to issues with neighbours, or if the seller lied on the property information form about flooding.
It could be considered misrepresentation if the seller knew of a problem but didn’t disclose it to the seller when asked during the conveyancing process, if they hid a problem with the property or purposefully didn’t include information about it in response to a direct enquiry. The seller has a duty to be honest and accurate in their answers and the information they supply to the buyer.
Can a home buyer sue the seller?
If you have bought a house in England and Wales, with problems not disclosed by the vendor (seller), then you may be within your rights to sue or rescind the contract. From nightmare neighbours to damp walls and pest issues, or not declaring flooding when selling a house in the UK, a seller is legally required to state anything that is wrong with the property, before completing a sale. However, it does depend on the defect discovered by the home buyer and when they discovered it as to what action they are within their rights to take. If a defect is discovered in between exchange and completion, the buyer has the right to refuse to complete the sale, request a specific amount to be knocked off the purchase price or be entitled to damages. If the buyer discovers a defect after completion, the buyer may be able to claim damages in respect of a breach of contract or misrepresentation or they may be able to rescind the contract altogether. As a buyer, you are entitled to claim damages if there is a significant difference between the description or value of the property and how it actually is. Don’t suffer in silence if you have been mis-led when buying your home; look into property misrepresentation claims in the UK to see if you can seek damages or other recourse.
Is a verbal offer on a property legally binding?
In England and Wales, an offer on a property isn’t legally binding until contracts are exchanged. An offer can be made verbally (over the phone or in person) but this should not be taken as final. In reality, there can be up to several weeks between a verbal offer and the signing of contract. Until contracts are exchanged, a buyer’s verbal offer is ‘subject to contract’ which means the price can still be negotiated (usually in the instance of a survey revealing a problem).
How long are you liable after selling a house?
The liability of a seller after selling a house is typically limited to the information they provided during the sale process. Once the sale is complete and contracts are exchanged, the seller's liability for any undisclosed issues or misrepresentations diminishes. However, there may be exceptions, so it's advisable to seek legal advice for specific cases.
How do you prove property misrepresentation?
To bring a misrepresentation claim, you need to show the seller answered enquiries inaccurately or incorrectly and prove they knew of the issue before the sale. Speaking with neighbours for supporting statements can help. For example, proving the seller knew about undisclosed asbestos or Japanese knotweed can strengthen your case.
How much can you claim for misrepresentation?
You can claim the full purchase price plus interest if the contract is rescinded. For damages, you can claim the difference between the price paid and the property's actual value, along with any additional losses directly resulting from the misrepresentation. Your entitlement to rescind depends on various issues and so it is important to seek independent legal advice on these issues as soon as possible.
What is the time limit for property misrepresentation in the UK?
In the UK, you have up to six years to file a property misrepresentation claim. The statute of limitations for such claims is normally six years from the date of exchange of contracts for the purchase. It is important to seek independent legal advice as soon as possible to avoid any claim becoming time barred.
Is it difficult to prove misrepresentation?
Proving misrepresentation in a fraud case can be complex and challenging. It requires a thorough understanding of the law and experience in investigating and litigating fraud. Therefore, seeking legal assistance is crucial if you believe you've been a victim of misrepresentation.
What needs to be proven for misrepresentation?
To establish misrepresentation, the plaintiff must establish that a material false statement or omission occurred, influencing their decision to enter the contract. Moreover, they need to demonstrate resulting damages. Essentially, it boils down to proving deceit that led to tangible harm, a crucial aspect in contractual disputes.
What is misrepresentation?
Misrepresentation is when one party makes false statements that impact the other party's decision to enter a contract. Its discovery can render the contract void, and the aggrieved party may pursue damages depending on the circumstances.
How are damages for misrepresentation calculated?
Damages for negligent or fraudulent misrepresentation adhere to standard principles. Alongside rescission, compensation aims to restore the injured party to their pre-contractual state. Essentially, the awarded damages seek to rectify the impact of the misrepresentation, aligning with legal precedents. Ordinarily this could be assessed as the diminution in value between the value of the property without defects to the value of the property with defects.
What happens if an agent misrepresents a property?
If a property seller or any professional involved in the transaction misrepresents the property, you could have a basis for a claim in the UK. Seeking prompt legal advice is essential to assess your options for potential recourse against the misrepresented property.
What happens if you buy a house with undisclosed problems?
If you've bought a house with undisclosed issues and possess evidence, you can pursue legal recourse against the seller for misrepresentation. Alternatively, if third parties are liable, consider lodging a complaint for professional negligence to seek redress for the undisclosed problems.
Do you have to declare problems with neighbours when selling a house?
As a seller, you are legally obligated to disclose any disputes or issues with neighbours when selling a house. Failing to do so could result in legal repercussions, highlighting the importance of transparency in property transactions regarding neighbour-related matters.
How do you defend a misrepresentation claim?
Defending claims made against you in misrepresentation involves proving lack of knowledge regarding the false or misleading statement made. If you relied on information provided by another person without reason to doubt its accuracy, it can weaken the claimant’s claim of dishonesty, serving as a potential defence strategy.
Does a seller have to declare asbestos?
Sellers are obligated to disclose the presence of asbestos during the property sale. If they're aware of its existence or have conducted an asbestos survey due to construction activities, they must provide this information to the buyer. Compliance with these regulations ensures transparency and buyer safety.
What is the burden of proof for misrepresentation in the UK?
In the UK, the burden of proof for misrepresentation lies with the claimant. They must demonstrate that a misrepresentation occurred and that it influenced the contract's formation. Representations devoid of fraud or negligence constitute innocent misrepresentation.
