Misrepresentation by seller

pretamang

More flat buying woes...

I've been in the process of buying a share of freehold flat; mortgage, survey, and conveyancing was all in place and I even had a moving date agreed until a problem was discovered at the last minute.

Turns out the seller does not own a share of the freehold and is now looking to continue by selling only the leasehold, which also needs renewing in the next few years.

Is there any way I can get compensation from the seller for the costs I've paid so far given that this is a clear misrepresentation? I've had a look at some of property misdescriptions act, but it seems only to apply to estate agents. I believe the estate agent acted diligently here as they couldn't have known about the legal issues.

jee

Who told you the flat had a share of the freehold and when? I'm assuming your solicitor has found out it doesn't.
And can you get the price knocked down so you can buy a share and at the same time request the seller to get the ball rolling in applying for a share? Assuming you still want the flat.

pretamang

the flat was advertised as share of freehold; the sellers and their solicitors have stated many times and kept making excuses for delays in producing any documentation confirming this.

They've now admitted to not owning a share the first place, and they aren't able to acquire a share. I think they've been trying to acquire it for the last few months whilst delaying things, so I don't really want to buy the lease and find myself in the same position.

G_M

Many possible explanations: the seller may have thought he has a share of the freehold (it's amazing how many people do not understand what they own!); he may have been trying to buy it and genuinely have believed he would own it in time; or, or or

I'm afraid this is why conveyancing takes time - so that the validity of Title can be checked (along with other things). And clearly this is what has happened.

What to do now? Well, obviously the property you are buying is worth less if it is only the lease you are buying (did you know the length of the lease when you agreed the price or has this too changed?)

I would reduce the purchase price to reflect the changed purchase. If the seller won't agree, of course, you'll have to decide whether to walk away or just pay up!

pretamang

I'm very much thinking that I'll have to walk away.

The question is though: is there no way I can recover my costs? The sellers and their solicitor have got themselves into a mess, continued to mislead me, and ultimately could never deliver on the deal they proposed.

jee

I really don't think you'd get very far. Sorry.
If you like the flat negotiate a deal to get it cheaper and ask the seller if they'll serve notice to get the lease renewed.
If it's a flat in a block where others have a share of the freehold you'll buy the share and then pay the admin costs of renewing the lease. It'll take time but you will get there in the end.
Is the freeholder a private individual/company/council?

ValHaller

pretamang wrote: »

I'm very much thinking that I'll have to walk away.

The question is though: is there no way I can recover my costs? The sellers and their solicitor have got themselves into a mess, continued to mislead me, and ultimately could never deliver on the deal they proposed.

The normal answer to any question about costs prior to exchange of contract is that you bear your own costs. But in this case, if you have evidence that his solicitors represented that he was selling a share of freehold, I would say that you should be due costs incurred after that point, but you might have an uphill struggle.

You need to pull out of the deal fairly sharpish, to make it clear that the property is of no interest as things are currently

pretamang

the freeholder is a management company owned by the other flats in the building (2 of them). It turns out the seller was the under the impression they were acquiring a share of the company as well as the lease when they bought the flat a few years ago but their solicitor (same person involved in this sale) didn't complete the paperwork and now can't rectify it retrospectively. Apparently the seller is starting a negligence claim against them.

My solicitor says I have no chance of recovering costs as the seller is entitled to pull out; but has anyone seen a situation where proven negligence against a solicitor would help me get something back?

hazyjo

You have more chance of seeing flying pigs than getting anything back - unless the seller felt responsible/guilty. The seller might stand a chance of getting some costs back if successful in his claim.

If there's a legal battle going on 'behind the scenes', I would be tempted to just walk away.

As above, how many years did you think were on the lease originally, and how many are actually on there? You do know that you would have had a lease even with 'share of freehold' (not an actual term, just one some people use to describe it).

Jx