Property Misrepresentation Claims

5 min read
A Property Misrepresentation Claims guide from Parachute Law

Buying a house can be one of the most stressful things you will do and for most people, the most expensive purchase you will ever make. Getting it right is important, obviously.

During the purchase process, you will try to find out all you can about the property. The legal basis for this is 'caveat emptor' or buyer beware, this means that you are responsible for ascertaining the state of the property before you exchange contracts, completing the transaction. However, the seller has a duty to answer any enquiries made by you, or on your behalf, honestly.

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What is the cost of our Property Misrepresentation Solicitor Review?

Our solicitor is available from 22/05/2024* and we offer the solicitor review for a fixed fee of £195 INC VAT.

If you want to make a claim against a third party, read our articles on Conveyancer Negligence or RICS Surveyor Negligence.

After an offer has been accepted, there is a period of time before the exchange of contracts, for the buyer to obtain all the information they need to complete the sale. The buyer will conduct the relevant surveys and property searches, and ask the seller questions about the property, often via their conveyancing solicitors. Usually the seller will provide certain basic information in advance, to speed up exchange. This information is submitted via property information form TA6.

TA6 states:
"It is very important that your answers are accurate. If you give incorrect or incomplete information to the buyer (on this form or otherwise in writing or in conversation, whether through your estate agent or solicitor or directly to the buyer), the buyer may make a claim for compensation from you or refuse to complete the purchase."

The seller should also complete and provide the TA10 fittings and contents form. This explains which items are, or are not, included in the sale.

If you are buying a leasehold, the seller will also provide a TA7 leasehold information form and you will need to get your freeholder, or managing agent to complete LPE1 form, (leasehold information pack).

All property transaction forms and leasehold forms are available from The Law Society.

Can I sue seller for misrepresentation?

If the seller makes a misrepresentation to you, which you rely on in your decision to purchase the property and you suffer a detriment as a result, you may be able to make a property misrepresentation claim.

Property misrepresentation claims can be resolved in several different ways:

  • The court awards you damages from the seller to compensate for any detriment you have suffered as a result of the misrepresentation.
  • The court finds that there was no misrepresentation made, or your decision was not in any way dependent on the misrepresentation, or you have suffered no detriment as a result.
  • The court orders a rescission of the contract. The sale is 'undone', you get your money back and you may also be awarded compensation for your costs.
  • The court finds that the seller is not responsible for the misrepresentation, it was in fact the solicitor's fault. The misrepresentation claim will fail, and you may choose to pursue a professional negligence claim against the solicitor.

If your claim succeeds, the award that you win will be appropriate to your case. Misrepresentations are classified in 3 ways:

  • Innocent Misrepresentation - The Seller makes a mistake
  • Reckless Misrepresentation - The Seller gives information without checking whether it is accurate
  • Fraudulent Misrepresentation - The Seller intentionally gives false information, or withholds the truth when asked directly during pre-contract enquiries

The Judge will consider the scale of the misrepresentation as well as the value of the detriment when assessing the award. Rescission is only awarded at the court's discretion and where an award for damages would not adequately compensate the buyer.

How do I make a claim for misrepresentation?

If you have not yet exchanged contracts, you can pull out of the sale, or, you can ask the seller to adjust their price accordingly.

If you have already completed on the purchase, the first step is to write a letter to the seller stating your position. It is advisable to instruct a specialist property dispute solicitor at this stage to assess your case and draft your letter. They will be able to draw on their vast knowledge of case law and make a strong legal argument for the seller to settle out of court, as well as being able to make a professional assessment of the proposed settlement sum.

Some people choose to DIY this letter, which will require you to spend some time familiarising yourself with the statute and case law surrounding misrepresentation, as well as reasonable awards for cases similar to yours. The most important thing, is that you are able to prove that a misrepresentation was made.

How do you prove misrepresentation?

The law which covers misrepresentations is The Misrepresentations Act 1967. You can find helpful practise notes on proving misrepresentation in accordance with this law at Lexis Nexis. Alternatively, contact us for advice on your case.

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