When a house is bought or sold, the prospective purchaser makes what are called ‘pre-contract enquiries’ in order to establish the exact details of the property being bought. These are normally in the form of a standard set of questions with any necessary amendments.
However, the fact that the questions raised are in standard form does not mean this can be treated as just a ‘form-filling’ exercise by the vendor, because the law of misrepresentation may apply where any response made is sufficiently at variance with the truth.
For the contract to purchase to have been procured by misrepresentation, it is necessary that the seller has made a reply which is factually untrue, as a result of which the buyer has entered into the contact to his or her detriment.
A person induced into entering into a contract by misrepresentation may be entitled to damages or to rescind the contract. Attempts to limit liability for errors and mistakes in replies to pre-contract enquiries will normally only be upheld by the courts if the limitation is reasonable.
It is particularly common, it seems, for vendors to fail to disclose known structural defects and long-running disputes with neighbours. Knowingly making a false claim or failing to disclose a salient fact can be a dangerous strategy.
A purchaser can go some way to protecting his or her position by making sure any particular questions on which they wish to have specific assurances are clearly put to the vendor. Some risks (such as title defects) can be insured against.
For advice on all aspects of the law relating to buying or selling property, contact Andrew Hunter.