The scramble to benefit from the Government’s Stamp Duty holiday has resulted in a surge in property misrepresentation claims. The firm has seen a 58% increase in homeowners contacting them in the past 12 months as they uncover significant issues with their new home following completion or once they have moved in.
These have included serious instances of flooding, protracted neighbour disputes over rights of way or shared spaces and strategically placed furniture masking issues with damp.
In an attempt to complete property transactions with minimal delays and purchase their next home, some homeowners are resorting to half-truths and deception on the Sellers Property Information Form (Form TA6).
This form and its contents provide the prospective purchaser with information about the property and is designed to ensure the buyer has enough information on any issues which may affect the property and help guide their decision on whether they want to go ahead with the purchase.
Buying a property is a big financial investment and it is important buyers know everything, the good and the bad, about their new home before committing to the purchase.
Liam Waine, a partner in the dispute resolution department at Stephensons, said: “The stamp duty holiday has created tunnel vision in the property market. In some cases, those looking to buy a home have become so motivated by the potential savings that they are resorting to some underhand tactics in order to sell their current home and avoid costly delays.
“We saw this as we approached the initial stamp duty deadline in March, and we expect it will be the same as the exemption comes to a conclusion at the end of September.”
Liam added: “What may have been a little white lie at the start of the selling process, could have serious consequences later down the line, not only for the buyer, who could face a large bill to rectify an issue but also for the seller.
“If a claim is brought against you for misrepresentation, you might find yourself being liable for damages if the claim is successful. In serious cases, this could extend to a buyer being able to rescind the contract, meaning the seller has to pay them back the full amount paid for the property.
“It’s so important that you’re as open and honest about any known issues with your property as soon as possible in the selling process.”
Liam gives the following advice for anyone who feels like they have been a victim of property misrepresentation or find issues with a new home that may have potentially been covered up. These are steps to take:
- The first port of call is to request the solicitor’s conveyancing file so you can check whether the seller was asked about the particular problem before exchanging contracts.
- Gather as much evidence as possible. If there are issues of flooding or neighbour dispute, speak to neighbours to see if they would provide a witness statement and try and track down any previous owners of the property.
- It would be useful if you could try and establish how much it will cost to put any problem right or whether you think you may have overpaid for the property. Normally a surveyor will be required to determine any diminution in value.
- Seek legal advice. A solicitor specialising in property misrepresentation will be able to determine whether you have a potential claim.
More information on property misrepresentation can be found here.