Misrepresentation & Property Sales

Misrepresentation should be avoided when completing the Seller's Property Information Form and replying to enquiries raised by the buyer or their solicitors. The information provided will be relied upon therefore it is important that you take care with your responses.

When completing the Conveyancing forms, and when responding to any enquiries raised, it is vital that:

• The answers are provided by the person or persons named as owner on the deeds (office copies of registered title), or by the owner's legal representative(s), where selling under a power of attorney (the Attorney) or grant of probate (the Personal Representative). If there is more than one seller, it is advisable that you collaborate on the answers, or if only one seller completes the Seller's Property Information Form, the other(s) should check the answers given, and all sellers should sign the form only when satisfied.

• Answer all questions as accurately as possible and from your own knowledge. However, sellers are not expected to have expert knowledge of legal or technical matters or matters that occurred prior to ownership of the property. It is acceptable to say “not known” . It is also worth remembering that there is some information that a buyer should obtain by carrying out a survey, arranging an inspection by an expert or by way of various searches.

• If you do not know the answer then say that. Do not speculate. Simply say “not known”. You may also add “rely on searches, survey and inspection”.

• It is very important that your answers are truthful. If you give incorrect or incomplete information to the buyer (on the Seller's Property Information Form or in written replies or in conversation, whether through your estate agent or conveyancer or directly to the buyer), then a buyer could seek to make a claim for compensation or refuse to complete the purchase.

• If you become aware of any information which alters any replies you have given, you should inform your conveyancer immediately. This is as important as giving the right answers in the first place. You should NOT change any arrangements concerning the property (e.g. with a tenant or neighbour) which would alter or affect the information you have previously given without consulting your conveyancer.

• If you do not know the answer to any question, you should say so. If you are unsure of the meaning of any of the questions then ask your conveyancer . Delays in completing the Seller's Property Information Form and/or responding to enquiries raised by the Buyer, or their conveyancer, may affect the sale. Leaving sections blank in the Seller’s Property Information Form will result in enquiries being raised by the buyer’s conveyancer.

• Be sure to give your conveyancer any letters, permissions, consents, warranties, guarantees, certificates, agreements, or other documents which help answer the enquiries. The buyer will want the originals, if you hold them. You will not need them once you complete.

• Do not agree things with the Estate Agent without consulting your conveyancer regarding the legal aspects.

• If you are aware of any relevant information but you are unable to evidence this then tell your conveyancer. If some of the documents are lost, you may need to obtain copies at your expense. You should also pass on promptly to your conveyancer any notices or other information you have received concerning the property, and any notices that arrive before completion occurs. If you are not sure if a notice is relevant or not then check with your conveyancer.

What’s The Worst That Could Happen?

There are cases where buyers have sued sellers for a decrease in property value due to relying on misrepresented information given during the conveyancing process. The buyers relied on this and may not have purchased the property had the situation not been misrepresented. Following completion the misrepresentation becomes obvious. Misrepresentation can be deliberate or accidental. Where the property value is affected by the issue, and the buyer suffers significant losses or costs in remedying the same, a claim is possible. A buyer will then seek to recover their losses.

Examples

One case centred around the presence of Japanese Knotweed at the property. Japanese Knotweed is an invasive plant which is difficult to remove and causes property damage. In another case the property had a serious moth infestation resulting in damage to the property and the buyer’s contents following completion. In both cases the buyers were successful and compensation was awarded.

There have also been cases where the Estate Agent inadvertently published errors in the sales particulars or brochure. So it is also important to ensure these are correct.

In essence beware and take care with your replies as a seller.

To understand more about the obligations on your buyer please see the related blog articles about ‘Buyer Beware’ (also known as ‘Caveat Emptor’), and my article about Searches and Survey.