Property misrepresentation claims
Following on from our ‘buyer beware’ article, Julia Fenton, Associate Solicitor in our dispute resolution team talks about what happens in a misrepresentation claim.
What is misrepresentation?
A contract to purchase a property is the same as any other contract. Therefore, if one party to provides a false statement which induces the other party to enter into the contract, they could be guilty of misrepresentation. If the misrepresentation leads to a financial loss, then the other party can pursue a claim for compensation.
Misrepresentation in property claims
There is no duty on a seller to voluntarily disclose defects or other problems with a property. They are however obliged to provide honest and accurate answers to questions either on the Property Information Form (which they are required to complete), or in response to enquiries raised by the buyer’s solicitors. Claims for misrepresentation most commonly arise when the seller fails to disclose, or knowingly misrepresents, answers to these questions.
The most common types of complaints are for a failure to disclose:
- Structural problems;
- Disputes with neighbours;
- Damp issues; and
- Issues with the position of the boundary.
What do I need to prove?
In order to be successful in a claim, you must be able to provide evidence that the seller gave an inaccurate/incorrect answer to a question, and that their answers informed your decision to purchase the property. If you had known the true position before buying the property and would have proceeded with the transaction regardless your claim would not succeed.
What am I entitled to if I am successful?
A successful claimant would usually be entitled to compensation. Usually this will be for the cost of any remedial works required to the property or for the diminution (decrease) in the value of the property caused by the seller’s misrepresentation.
Time limits
The time limits for bringing a claim depend on the circumstances of the case, but the general rule of thumb is six years from the date of the transaction. This can be extended in certain circumstances if you only become aware of the issue after expiry of six-year period by up to three years from the date you first become aware of the issue.
To find out more about our dispute resolution services, call us on 033 3344 9600 or email [email protected].
