Property Misrepresentation
What it means
“I know that navigating property disputes can be daunting. That’s why I pride myself on providing a personalised and strategic approach to every case. I’m here to guide and support you every step of the way.”
Misrepresentation is where one person provides another with a false statement of fact or law to induce them to enter into a contract.
There are three types of representation:
- Fraudulent misrepresentation occurs when the person knowingly, or recklessly, made a false statement;
- Negligent misrepresentation occurs when the false statement was made carelessly or without having reasonable grounds to believe it to be true;
- Innocent misrepresentation occurs when, at the time the false statement was made, the person believed it to be true.
Property misrepresentation can occur where:
- The seller makes an inaccurate statement about the condition of the property to the buyer;
- The landlord, or the landlord’s agent, made a false statement prior to the formation of the tenancy agreement.
What are the remedies for misrepresentation?
The remedies available include damages and the rescission of the contract. The remedies available will depend on whether the misrepresentation was fraudulent, negligent or innocent.
The aim of a damages award is to place the wronged party in the position it would have been in, had the misrepresentation not been made. It involves calculating the losses sustained as a result of the misrepresentation.
The court can order a rescission of the property contract. Effectively this results in the contract being undone, and the parties are restored to the position that they were in before the contract was entered into. However, it is only in exceptional cases that a court will look to rescind a contract.
We can represent a person seeking to bring a property misrepresentation claim, or defend such a claim, and provide expert legal advice on the remedies available.
When does misrepresentation occur on a property sale?
There is no legal requirement for a seller to voluntarily disclose information on the property. The onus is on the buyer to find out everything it needs to know about the property before committing to buy it. However, sellers have a duty to honestly and accurately answer all enquiries raised by the buyer.
A buyer will therefore raise pre-contract enquiries to obtain relevant information. The following industry-standard forms are commonly used:
- Commercial Property Standard Enquiries (CPSE) for the purchase of commercial property;
- The Law Society Transaction (TA) Forms for the purchase of residential property.
Property misrepresentation can occur when a seller dishonestly withholds information or provides false information in response to these enquiries. For example, a buyer may have a claim if the seller states that the property is free from Japanese Knotweed while knowing this to be untrue, or careless as to its truth.
Damages are usually assessed by the diminution in value of the property as a result of the issues. Damages might also include compensation for the inconvenience caused and for the cost of having any problems fixed.
We can act on behalf of a buyer or a seller in a property misrepresentation claim.
When does misrepresentation occur prior to a letting agreement?
Misrepresentation can occur if a landlord, or his agent, made a misrepresentation prior to the formation of a tenancy agreement. However, a mere statement of opinion will not usually be treated as a misrepresentation unless it amounts to a statement of fact.
If the statement does not amount to a misrepresentation, a tenant may still rely on the provisions of the Consumer Protection from Unfair Trading Regulations 2008 under which landlords and their agents are prohibited from giving or withholding misleading information. If a tenant is given false information or an overall impression that deceives, the tenant may be entitled to claim damages or to unwind the tenancy agreement.
As property misrepresentation solicitors, we can represent tenants and provide expert legal advice on the options available in your particular case.
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Jennifer and her colleagues at CG Naylor represented my daughter recently in a civil case. She very quickly grasped the complexities of the case especially when given only a limited time span. In company with other colleagues in the office she was able to present my daughter’s situation clearly and concisely. Whilst in the High Court and later at mediation in conjunction with the barrister and the claimants representatives she was forthright and compassionate. Whilst I have limited experience in civil matters my interpretation of the service received by CG Naylor is that it was excellent.
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