Property Misrepresentation

[Krogers]

We now believe that when we purchased our house the vendors deliberately deceived us. We believe we have a strong case for “misrepresentation” against them. We have written to the vendors, putting forward our case and they have placed all liability on our surveyor and threatened us with a harassment order. We need to know the legal steps to enable us to prosecute the vendor. The house has subsidence and this was not declared on the estate agent's Property Information Questionnaire (PIQ), which asks the question “Has the property ever been subject to subsidence?’ to which the vendor answered “No”.
In the Property Information Form (TA6), on page 2, under Instructions to the seller, it clearly states “It is very important that your answers are accurate. If you give incorrect or incomplete information to the buyer (on this form or otherwise in writing or conversation whether through your estate agent or solicitor or directly to the buyer), the buyer may make a claim for compensation from you or refuse to complete the purchase.”
The location of the subsidence is where the vendors had built an extension, for which they have a valid Building Completion Certificate. So we know the subsidence occurred over the time when they owned the house and we have evidence that they took steps to conceal the cracking.
We have successfully won an arbitration award from the surveyor (because he admitted seeing the subsidence during his inspection but decided not to mention it on the Homebuyers Survey) but this award is limited in value and may not cover all the costs of the repair. We are extremely concerned that even after the repairs are done that the property will be forever tainted by this subsidence and will never attain its true market value and that future insurance premiums will be more expensive
It does not cover the loss of value of the property or the enormous stress that we have been through in the last 14 months.
We need advice on:
1. Reliability of using forms TA6 and PIQ in court?
2. The best way of prosecuting this case, given that we are retired with limited funds?
3. What is a reasonable level of compensation for loss of value, re-saleability and the severe stress that this has caused us?
Kind regards

[staffordian]

A horrible situation to be in - my commiserations. Hopefully a legal mind will be along shortly, but were I in this situation, my first instinct would be to speak to the solicitor I employed when purchasing the property, who would still hold the paperwork from the transaction.

I also wonder whether the legal cover you probably have as part of your house insurance might assist?

[Lootman]

I was under the impression that the situation in law is that the vendors are not usually held liable, in the sense there is no redress against them. They can "say anything" and it is up to the buyers to independently verify what is represented via their due diligence.

It is the seller's estate agent (and possibly their solicitor and other professionals) who are legally liable for any lies or omissions. That is why estate agents are usually very careful not to make any claims on behalf of the vendor that they cannot independently verify. The claims they make are usually qualified in some way via a careful choice of words.

In other words amateurs are not held to a high formal standard, but the professionals involved are. At least that is what I have been told. Professionals also have deeper pockets and liability insurance for such things, so it is a better bet to go after them in my view.

[Clitheroekid]

I was under the impression that the situation in law is that the vendors are not usually held liable, in the sense there is no redress against them. They can "say anything" and it is up to the buyers to independently verify what is represented via their due diligence.

No, that's definitely not the case. I suspect you're confusing the extent of the term `caveat emptor' (buyer beware).

It's quite true that this principle does, nowadays almost uniquely, apply to the purchase of land and buildings. Unlike the purchase of a car, or a television, or a new kitchen, there are no implied terms that the land is fit for purpose, of satisfactory quality etc.

In other words the laws that provide consumers with protection against the purchase of dodgy goods and services don't apply to the purchase of land.

A vendor is entitled to remain silent if asked about the land, but if he chooses to provide information about it he then waives the protection of caveat emptor so far as that information is concerned. If that information is false, whether knowingly or not, and the buyer has relied on it when entering into the contract then it can amount to a misrepresentation. And this gives the purchaser a legal remedy.

The basic remedy is `damages' - financial compensation. This is generally based on the `diminution in value' principle - the difference between what you paid and what you would have paid had you known about the subsidence.

However, in more serious cases the court will sometimes actually `rescind' (cancel) the contract, and order that the vendor take the property back. There would also be an award of damages to compensate the buyer for all the hassle and expenses they'd incurred.

So to deal with your specific points:

1. Reliability of using forms TA6 and PIQ in court?

Entirely reliable - they are specifically designed so that the answers form part of the contract.

2. The best way of prosecuting this case, given that we are retired with limited funds?

You would normally employ solicitors to try to negotiate a settlement without going to court. Most such cases are settled out of court, and litigation should always be seen as a last resort.

3. What is a reasonable level of compensation for loss of value, re-saleability and the severe stress that this has caused us?

Unfortunately it’s impossible to say, as such cases are always very fact-specific. However a solicitor will be able to advise in more detail.

As staffordian correctly pointed out you should check to see if you have legal expenses cover with your contents insurance, and, if you do, give them a ring.

Keep us informed of progress.

[Lootman]

I was under the impression that the situation in law is that the vendors are not usually held liable, in the sense there is no redress against them. They can "say anything" and it is up to the buyers to independently verify what is represented via their due diligence.

No, that's definitely not the case. I suspect you're confusing the extent of the term `caveat emptor' (buyer beware).

It's quite true that this principle does, nowadays almost uniquely, apply to the purchase of land and buildings. Unlike the purchase of a car, or a television, or a new kitchen, there are no implied terms that the land is fit for purpose, of satisfactory quality etc.

In other words the laws that provide consumers with protection against the purchase of dodgy goods and services don't apply to the purchase of land.

A vendor is entitled to remain silent if asked about the land, but if he chooses to provide information about it he then waives the protection of caveat emptor so far as that information is concerned. If that information is false, whether knowingly or not, and the buyer has relied on it when entering into the contract then it can amount to a misrepresentation. And this gives the purchaser a legal remedy.

The basic remedy is `damages' - financial compensation. This is generally based on the `diminution in value' principle - the difference between what you paid and what you would have paid had you known about the subsidence.

However, in more serious cases the court will sometimes actually `rescind' (cancel) the contract, and order that the vendor take the property back. There would also be an award of damages to compensate the buyer for all the hassle and expenses they'd incurred.

So to deal with your specific points:

1. Reliability of using forms TA6 and PIQ in court?

Entirely reliable - they are specifically designed so that the answers form part of the contract.

2. The best way of prosecuting this case, given that we are retired with limited funds?

You would normally employ solicitors to try to negotiate a settlement without going to court. Most such cases are settled out of court, and litigation should always be seen as a last resort.

3. What is a reasonable level of compensation for loss of value, re-saleability and the severe stress that this has caused us?

Unfortunately it’s impossible to say, as such cases are always very fact-specific. However a solicitor will be able to advise in more detail.

As staffordian correctly pointed out you should check to see if you have legal expenses cover with your contents insurance, and, if you do, give them a ring.

Keep us informed of progress.

Fair enough. It was the last estate agent who sold a property for me who told me that "it doesn't matter what you say, but it really matters what I say".

I would sue all of them - the vendors and his/her professionals.