When selling a property, it’s absolutely vital that sellers disclose any and all information in response to the buyer’s enquiries.
Alistair Millar, conveyancing lawyer at Tallents Solicitors in Southwell looks at some common issues which can delay or derail a sale.
Initially, the buyer’s solicitor will request a copy of the draft contract from the seller’s conveyancer. They will examine the draft contract and supporting documents, such as the Seller’s Property Information Form (SPIF) and then they will raise additional enquiries on behalf of the buyer.
The seller will complete the SPIF, which contains questions regarding issues such as: maintenance of boundaries, planning issues, any disputes involving the property, occupier’s interests in the property, any guarantees for work carried out on the property and any notices received by the seller which may affect the property.
A careful buyer will ensure they ask all questions possible relating to the property, which will allow them to complete the property transaction with peace of mind. However, the buyer is reliant on the answers given to their enquiries by the seller.
Consequences of failing to respond to buyer’s enquiries
Earlier this year, the High Court ruled in a case, Morrell and another v Stewart and another, which involved the sale of a residential house with boarding kennels and a cattery business on the surrounding land.
The sellers were found guilty of fraudulent misrepresentation and breach of warranties in the business sale agreement.
They had failed to disclose to the buyers, problems with the foul drainage on the property. Sewage ran into a tank, and overflow from the tank ran into a dyke, from which it was pumped away by a pumping station. The sellers had been advised by the Environmental Agency (EA) that this was unlawful and had to cease.
When responding to the buyer’s enquiries, the sellers failed to disclose the issue with the drainage, the work they had carried out and the requirements imposed by the EA.
The High Court ruled that the buyers’ claims were made out as a matter of liability in relation both to misrepresentation and, to the extent of the business sale agreement, in breach of contract. Damages were assessed at £33,000.
This case highlights some of the issues that can crop up when responding to buyer’s enquiries:
- – The initial problem had been resolved and the sellers thought it didn’t need to be disclosed
- – The buyers didn’t commission an independent survey
- – Issues cropping up after representations have been made but before contracts were exchanged were still not disclosed
The buyers entered into the contract to purchase the property and land based on the SPIF and the answers given to their enquiries. However, they were not given all the relevant information for them to make a considered decision to purchase the property and the High Court ruling reflected this.
Always respond to buyer’s enquiries honestly
It’s absolutely vital that sellers disclose all information when requested to. Even if they do not think it is totally relevant at the time. At this point in a sale, honesty is definitely the best policy to avoid delays in the sale of the property and prevent it falling through completely.
Our conveyancing experts at Tallents are here to help and advise you whether you are selling or buying a property. You just need to ask.