Residential Property Newsletter April 2010
Has your new home turned out to be not quite what it seemed?
What can be done to stop nasty surprises?
The estate agent's particulars are often seen as a little bit of cosmetic deception, which is the long-established part of the house buying game. Many buyers are familiar with estate agent jargon: "handy for local transport" (the teacup-rattling railway line just yards from the kitchen window) or “compact and bijou” (cannot swing a cat). Then there are the cleverly photographed rooms that turn out to be no bigger than a cupboard.
Even a brief viewing can mask a few home truths; a damp patch hastily covered with a lick of paint, or the background music turned up to drown out the sound of the neighbours on the other side of the party wall. That charming green park across the road, the perfect place for a family picnic on a sunny afternoon, that after dark, is transformed when ‘hoodies’ from the local estate gather outside the gates, bottled lager and roll-ups in hand. Or what about the low-flying jets from the local RAF base, which can shake the mortar out of your brickwork - why did nobody mention them?
In most cases, the truth emerges long before completion, thanks to the mass of legal searches and routine questioning of the seller by the buyer's solicitor that are part of the whole process. Occasionally, however, things can and do go wrong.
This was concisely demonstrated in a case before the High Court in January this year that was watched closely by surveyors and conveyancing solicitors.
The dispute centred on a semi-detached 1920’s house by the River Thames in Teddington, Surrey. The house was bought by Mr. & Mrs. Howd for £1,900,000.00 in October 2006. As is usual, before the Howds parted with their cash, their solicitor asked whether the property, ominously named Tide's End, had suffered from any flooding. The lawyers acting for the sellers, Mr. & Mrs. Console-Verma said no at least that is not during their 14-year occupancy.
However, shortly after the Howds moved in, the Thames broke its bank and flooded the 140ft garden. Since then the Howds claimed that the river had gone on to flood the garden 80 times a year. The buyers demanded their money back on the grounds that they had been misled.
For their part, the Console-Vermas insisted that they had answered the flooding question truthfully. As they understood it, the flooding query related to the house itself, rather than the garden. On the last Friday in January, the two parties came to a settlement, the details of which are confidential.
It's not only flooding that can provoke a dispute between buyers and sellers. Increasingly, sellers are being asked large numbers of questions by buyers' solicitors, but they often fail to treat them with sufficient seriousness. Sellers who give casual answers do so at their peril and risk ending up in court as a result. What sellers are not taking into account is that the replies they give to the buyer’s solicitors' inquiries are very important. Sellers should always discuss their replies with their solicitor and take appropriate advice.
In house buying the principle of "caveat emptor" (buyer beware) applies. However, this is being eroded and replaced by one of "caveat venditor" where a buyer, through their solicitor, raises prudent enquiries of the sellers and then relies on the replies received. The buyer should still beware, but increasingly the onus of disclosure is being placed on the seller.
A change in the law may be a solution. For example, in Denmark buyers have the right, for 20 years after a sale, to come back to the seller and demand compensation for faults that have come to light since the purchase. As a result, sellers take out insurance cover and carry out rigorous surveys to ensure that there are no hidden problems.
Until British sellers curb their natural reluctance to point out defects in their own homes, what can buyers do?
When buying always view the property more than once and at different times during the day and week. Discuss any concerns you may have with your solicitors. Ask them to raise these by way of written enquiry. Then wait for a written reply before exchanging. Remember a buyer cannot rely on a verbal statement when it comes to the sale of land. Always ask your solicitor to commission all the relevant property searches and, lastly, always get a full survey.
To discuss this or other areas relating to residential property, please contact one of our specialist property team on 0845 267 0241.
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