Can you rely on a seller’s information form when buying a home?
How much can you rely on a property information form provided by the seller when you are buying a home?
A recent case before the High Court shows the need for caution when interpreting the responses given on some questionnaires.
The case involved a couple buying a property surrounded by woodland and farmland. Question 3.1 of the property form asked whether the seller had received any notices which in any way affected the property.
Question 3.2 asked whether the seller had had any discussions with any neighbour or any local authority affecting the property in any way. The sellers answered "no" to both questions.
Contracts were exchanged in September 2010 and the sale completed in October. In November, a planning application was submitted for a substantial residential development beginning around 250 metres from the property.
The site had been identified as a preferred site in a consultation process on a core strategy which had begun in 2006. In May 2011, an application was made for a further development on another nearby site. That site had also been identified, but later dropped, as a preferred option.
The sellers had attended public meetings about the core strategy, had received leaflets from a local campaign group opposing development, and had been involved in conversations with a group member about the developments.
The buyers took legal action claiming damages from the sellers on the basis that their answers had amounted to fraudulent misrepresentation.
The court ruled in favour of the sellers. It held that it was for a buyer to satisfy himself about the state of a property and other relevant matters. Questions on the form were intended to be answered by the sellers as lay persons; they were not to be interpreted in such a way that expert advice would be required to understand the scope of the information required.
The question was whether a reasonable person with the seller's knowledge of the facts would consider that the property was affected. "Affecting the property" required that the possible future event would have some effect on the property itself, or the use or enjoyment of it. A possible effect on its value would not be enough on its own. Nor would a general effect on the locality be sufficient.
The reasonable person would have concluded that the likely development of the first site would not affect the property, and that the core strategy was not such as to show any sufficient risk that the second site would be approved for development. The answers in the form had not been misrepresentations.
The case illustrates the need for seeking professional help from a solicitor when buying a property to ensure you know everything about it before buying, without having to rely on information provided solely by the seller.
Please contact Gurjit Dhadar if you would like more information about buying or selling a property.