Do we have a case against the Estate Agent for mis-selling the house?

The_Mystery_Guest

Hi!
I was hoping that you might be able to help with some advice. We can’t decide whether we have a case against an estate agent for mis-selling a property, which resulted in us being £900 out of pocket when a purchase fell through. Any thoughts or suggestions would be gratefully received, here is the story:
We are first time buyers and had an offer accepted on a house before Christmas. All was looking good so we went ahead and got a survey and searches conducted (in total about £900) and were proceeding with the sale.
Then, when the contract docs started to appear, we noticed something was wrong. The house was being marketed and sold as freehold, and the seller and Agent had confirmed it was freehold to us in person. However, the contract docs said we were only buying a short (<80yr) leasehold... When we pointed out this mistake, it came to light that the person selling the house had actually released equity 6 years previously and as a result had signed over the freehold to an equity release company. So, the equity release company were the ones who really owned the property, not the 85yr old man living in it and trying to sell it. When our offer was presented to the company, they said they wouldn’t accept it, and wanted £10K (ten thousand) more than our offer. We don’t have this extra money, and so the purchase ended.
So, we are back to square one, but £900 pounds out of pocket. We would NEVER have spent the money on a survey and searches if we knew the true status of the house. Whilst house purchases fall through all the time for a variety of different reasons, we think this never should have happened in the first place if the Agent had properly established that the individual selling the house actually owned it.
To be fair to the Agent, it is very likely that they did not know about the equity release until we did, but surely they should ensure they know the true status of a property before they market it and try and sell it?
We only want to see if we can recover the money we have spent, but don’t know, 1) whether we do have a case against the Agent, and 2) how to go about getting it back.
We’d be really grateful for any help / advice / suggestions anyone has on this.
Thank you!
Rich

BitterAndTwisted

Agents act upon the vendor's instructions. By what means do you think the agent could check how the property was owned other than from information supplied to them by the vendor?

If you have a beef, it's with the vendor IF they understood the whole equity release thing they did or not. I suspect not. You need proof that they did and knowingly made false representations. Good luck with that.

googler

EA (to seller) : "Do you own the house?"
Seller : "Yes"
EA (seeing the seller is 85 years old) : "Are you sure? No loans secured against it, anything like that?"
Seller : "Absolutely sure."

OP, what are you expecting the EA to have done?

Where would you expect them to get the information from, other than from the seller?

taxiphil

googler wrote: »

EA (to seller) : "Do you own the house?"
Seller : "Yes"
EA (seeing the seller is 85 years old) : "Are you sure? No loans secured against it, anything like that?"
Seller : "Absolutely sure."

You make the due diligence defence under the Property Misdecriptions Act sound like child's play! Which clearly it isn't, or the Act would be pointless.

Running_Horse

Sounds like your argument is with the seller rather than the agent.

Good luck with recovering that £900 from an 85 year old man with money problems.

ruggedtoast

I don't think you'll get far I'm afraid.

mufi

Running_Horse wrote: »

Sounds like your argument is with the seller rather than the agent.

Correct - the vendor will have signed off the agent's prepared property details as accurate; liability lies with a (possibly) confused 85 year old...

littleskintdragon

I agree that even under the property misdescriptions act its a difficult one.
I would speak to the agent and see what checks they make to ensure the property they are selling is sold as listed,and whether or not these were made.

kingstreet

Where did the agent suggest the property was freehold?

On the sales particulars?

WhiteHorse

Does the EA's literature state that the property is freehold and unencumbered? If you have a hard copy, you will have a case.

It must be stressed that the Act does not cover the seller of the property if they are a private individual. This means that if an estate agent passes on incorrect information received from the seller of a property, the estate agent not the seller would be liable under the Act.

Case against the EA, not the vendor.

The offence of making a statement which is false or misleading is one of strict liability under the Property Misdescriptions Act 1991.

'Strict liability', is quite fierce.

The EA will need to show 'due diligence' - that they took reasonable steps to ensure accuracy.

The EA will not, unless the court gives permission, be able to rely on the defence that they simply relied on false information given by another.

It's a moot point whether when seeing that the vendor was old and possibly confused, they should have pressed the matter further. However, short of checking the Land Registry themselves, it is difficult to see what they could have done, other than ask the vendor.

muskoka

There is a LEGAL term called 'innocent misrepresentation'. Definite...definite...definite....but whether you will have any success if a different matter. Go see a solicitor - free half hour interview & ask him to see if you can claim under that term.