Buying a new home is a significant financial decision, but it can become a living nightmare if serious issues crop up after you move in.
In this article, we'll look at what a buyer's options are if they buy a house with problems not disclosed, including how you can make a legal claim against the seller or third party for professional negligence.
We'll cover key topics such as the concept of "sold as seen," examples of property misrepresentation, disclosure requirements in the sale process, the liability of estate agents for undisclosed problems, and how to report problems before exchanging contracts.
What happens if you discover problems after buying a house?
Discovering issues after completing the sale and exchanging contracts can feel more like a case of bad luck over seller or agent negligence. However, in some circumstances, you don't have to bear the financial burden alone.
Despite the costs incurred during the buying process, such as solicitor's and conveyancing fees, you may have grounds to claim that the seller misrepresented the property's condition, intentionally or unintentionally, and seek compensation.
What does sold as seen under caveat emptor mean?
In the UK, properties are sold under the principle of caveat emptor, which translates to "let the buyer beware" in Latin. No doubt a phrase you are already familiar with.
This principle puts the responsibility on the buyer to thoroughly check the quality and suitability of a property before making a purchase.
On the other hand, sellers are legally required to be upfront about any known issues with the property, and their solicitors must respond to any inquiries from the buyer's legal team on the subject.
The principle of sold as seen under caveat emptor highlights the importance for buyers to conduct a comprehensive survey before finalising a property purchase.
Examples of property misrepresentation
Under the Misrepresentation Act 1967, a buyer may seek compensation if the seller:
Deliberately lied about the condition of the house
Failed to provide enough information about the property.
Common instances of property misrepresentation include:
Structural problems
Damp and mould
Misleading property boundaries
Failure to disclose neighbour disputes
Water damage
Parking information.
Can you take legal action against the seller if you purchase a house with undisclosed problems?
If the information provided by the seller was incorrect and influenced your decision to buy the property, you may have grounds for a misrepresentation claim against them.
To build a strong case, you'll need to show that:
The seller provided inaccurate information in response to your inquiries
The seller was aware of the issue before you purchased the property.
In some cases, it may be appropriate to consider legal action against a property surveyor if they overlooked an issue during their inspection. In such cases, this would be a claim for professional negligence.
Our team of property solicitors specialise in advising homeowners in situations where undisclosed problems arise after a home purchase.
Contact us today for a free case evaluation from our expert Legal Assessment Team.
What should sellers disclose when selling a house?
Sellers aren't obligated to disclose anything unless you or your solicitor ask specific questions. However, sellers must disclose all known issues about a house in response to inquiries.
Typically, sellers provide this information on their property information form. Additionally, they should also disclose details of any modifications to the property, such as extensions or conservatories.
Can a seller be responsible for repairs after selling a property?
In some cases, sales will fall through if significant repairs are needed to address structural issues discovered before completing a sale. But what if you end up paying to fix issues not highlighted in the surveyor's report and not disclosed by the seller?
The good news is, that if you can prove that the seller knew about the issue but failed to disclose it, you can seek reimbursement for costs.
When sellers are upfront about property defects and don't intentionally hide problems, they aren't responsible for repair expenses incurred following completion. However, if you enquire about a specific aspect of the property, such as dampness, sellers must honestly disclose all relevant information within their knowledge and can be held accountable for any resulting expenses.
What is the Misrepresentation Act?
The Misrepresentation Act 1967 aims to safeguard consumers from dishonest claims and covers various aspects of consumer purchases and contract law.
In property transactions, the Misrepresentation Act serves to protect buyers from properties misrepresented by sellers and offers them legal recourse in the form of compensation if they discover inaccuracies after purchasing a property.
Under the Act, buyers can file claims against third parties responsible for misrepresenting sales, including:
Estate agents
If an estate agent provides faulty advice or information, buyers can first complain to the agent and escalate it to The Property Ombudsman Scheme if necessary.
Surveyors
Buyers can make professional negligence claims against surveyors or conveyancing firms if they don't identify property defects before the sale.
Solicitors
If a solicitor's representation is at fault, buyers can raise the issue directly with the solicitor's law firm and, if needed, escalate to the Legal Ombudsman or complain to the SRA. While buyers typically can't sue the seller's solicitor, they can sue the seller, who in turn may seek compensation from their solicitor.
Do estate agents have to disclose issues with a property?
Yes, estate agents should disclose any relevant information that potential buyers should be aware of, including:
Accurate information about the property's dimensions and boundaries;
The Energy Performance Certificate (EPC) rating, which can affect mortgages and tax benefits;
Council tax bands applicable to the property;
Details of any extensions, modifications, and parking arrangements.
Estate agents also should make sure that photos provided of a property accurately show its current condition.
Can an estate agent be held responsible for undisclosed problems?
Yes, estate agents are legally bound to disclose any issues with a house to potential buyers. Failure to do so can result in them being held liable.
In such claims, you can use the property listing as evidence in a claim against the estate agent. Therefore, it's advisable to take a screenshot of the listing early in your house hunt and keep it saved for reference. This could serve as evidence that the property was misrepresented by the agent, which your property solicitor can use when pursuing your claim.
How long do you have to report problems after buying a house?
If you discover undisclosed problems after purchasing a house, you typically have six years to make a complaint.
For your claim to be successful, you'll need to prove that the problem existed before you exchanged contracts and that it affects the value of your house.
If you discover the problem after the initial six-year period has passed, you still may have three years from the discovery date to begin a claim.
These timelines make up the statute of limitations for fraudulent representations. However, our advice is to seek advice specific to your situation from a solicitor as soon as possible upon discovering undisclosed problems with a newly purchased property.
What are the possible outcomes when you take a seller to court for misrepresentation?
When considering legal action against a seller for misrepresentation, it's important to know what the potential outcomes might be. This could include:
Winning the case and receiving damages as compensation
Cancelling the contract, requiring the seller to repurchase the property
Losing the case ends in you footing the bill for the seller's legal costs.
Before making such a claim, it's important to carefully consider the outcomes of your goals before going ahead with legal action.
For personalised help with this, get a free case evaluation from our legal assessment team.
What should you do if you notice undisclosed problems before exchanging contracts?
If issues come up in a surveyor's report, or indeed if the seller discloses problems, you have several options:
Withdraw from the sale altogether
Negotiate with the seller for a reduced price
Request the seller address the problems and cover the costs involved in doing so.
Ultimately, it's down to the seller to decide how to proceed, as they aren't legally obligated to fix the problem.
That being said, many sellers will choose to reach an agreement with the buyer, as unresolved issues may continue to be a dealbreaker and affect their ability to sell the property to other buyers.
As a buyer, it's up to you to decide whether to proceed with the purchase in full knowledge of the discovered issues, negotiate further with the seller, or withdraw altogether. Sometimes, the best approach may involve a mixture of all three, the outcome of which hinges on the seller's willingness to negotiate or fix a problem.
Legal advice for buying a house with problems not disclosed
For personalised assistance with the conveyancing process or to determine if you have a strong case for seeking compensation due to representation, don't hesitate to reach out to us today.
Our solicitors work remotely for fixed fees, offering faster, more affordable services to individuals across the UK.
Contact our legal assessment team today for your free case evaluation.