Yes they absolutely are.
It’s really important to understand that if you are selling your home, you need to give accurate and honest on the Sellers Property Information Form.
When someone is buying your property, their solicitor will ask a number of questions to you through your solicitor. These are usually contained within the Sellers Property Information Form or in the Law Society Sellers Property Information Form. Once you have completed the form, you sign it to state that the information you’ve given is true.
There are specific questions included on the Sellers Property Information Form and these include:
- Details about the boundary positions and ownership
- Information about relationships with neighbours, including any disputes
- Any rights that affect their property
- Information about any building control or planning matters
- Details about structural issues or flooding that affect the property
The questions about the property are really important as they help the buyer decide how much they want to pay for the property and if they even want to continue to buy it!
If the buyer alleges that you provided untruthful replies on your Sellers Property Information Form, they may have a legal basis for a claim for misrepresentation. These claims can either be made as negligence claims or under the Misrepresentation Act 1967. More usually, a claim would be made in both.
There are three ways that a misrepresentation claim can be made. The difference between them is the knowledge of the seller when the form was signed. They are:
- Innocent misrepresentation – the seller can show that they had good reasons to believe that what they said was true
- Negligent misrepresentation – the seller cannot show that they had good reasons to believe what they said was true
- Fraudulent misrepresentation – the seller has given information that they know is not true
But regardless of which type of misrepresentation is made, the buyer has to show all of the following things to make a claim. They are:
- the seller made a representation of fact and not just an opinion
- the buyer relied on that fact when they entered into the contract and purchased the house
- the representation was false when the contract was entered into
- the buyer suffered a loss because of it.
Buyers Only Realise Once It’s Too Late
For most people, they don’t realise there is an issue until after they move into their new property.
Some of the most common issues that our clients come up against are:
- Finding out that they are now in the middle of a bitter neighbour dispute over the position of a common boundary.
- Finding out that the seller agreed to allow others to walk, drive or park on their land.
- Finding out that work on the property has not passed building control or has been built without planning permission.
What Can A Buyer Do About Misrepresentation?
It really depends on how serious the misrepresentation was. Remember, you can use any of the three classes of misrepresentation to make a claim – they are innocent representation, negligent representation and fraudulent representation.
In theory, the buyer could ask that the contract is terminated and both buyer and seller go back to the position they were in beforehand. But the reality is different as many buyers and sellers form part of a chain so this wouldn’t be feasible.
As a result, most people who find themselves in this position will look for the court to award them damages instead.
The amount of damages is usually worked out by looking at the difference in the price paid for the property and the true value of the property on the open market had the misrepresentation been revealed.
Because this is quite a complicated assessment, an expert valuer is usually needed to do this. The amount could range from no financial loss at all right up to tens or even hundreds of thousands of pounds depending on how seriously the facts were misrepresented.
Think Carefully When Completing Your Forms
When you are selling your property, you should be aware that whilst your replies do not form part of the contract (unless it says so), they do influence the decision of the buyer. Think carefully about your replies as you could find that your buyer wants damages if something goes wrong.
Time Limits For Misrepresentation Claims
All buyers should be aware that there is a limit on the amount of time you have to make a claim for misrepresentation. There are times when issues are not discovered for some time after moving in, but there is generally a rule that you have 6 years from the date of the exchange of contracts.
If you are in any doubt, call and speak to our disputes resolution team who can help with a free initial discussion.
Call now on 0117 926 4121 or make a Free Online Enquiry.