Estate Agent Misrepresentation

Johnnyj

My son is close to exchanging contracts on a leasehold flat.

His solicitor has just established that the maintenance charge figure that was advised by the estate agent as being per annum, is in fact a six month figure - so what he thought would be £900 pa is now £1800. A huge imposition for a young couple on a tight budget.

The estate agent wrote the figures, in pen, on the property details marketing sheet, and it clearly says £900 pa.

The likelihood is that he will pull out of the sale now.

My question is, does he have a claim against the estate agent for the various costs he has incurred (surveyor etc), as they provided incorrect material information about the property to him?

lee111s

You need to speak to the dealing solicitor.

martinsurrey

My guess is not.

The Property Misdescriptions Act 1991 gives them a due diligence defence, if they asked the vendor for details of service charges and they told them, and had no reason to doubt it, they are off the hook.

The Misrepresentations Act 1967 is only applicable if the misrepresentation was fraudulent (i.e. they knew it was wrong and didn’t do anything it about it) again, I doubt this to be the case.

The recent cases where buyers got EA’s to cough up for costs where were a sale had fallen through because of information the EA’s knew about, and should have disclosed (one was a nearby mineshaft in Wales).

In my (none professional) advice, take it on the chin and walk away.

Johnnyj

Thanks for that Martin.

The EA says that they have it in writing from the seller the incorrect maintenance fees. So yes, maybe they are off the hook.

I wonder if we can go after the seller..........

googler

martinsurrey wrote: »

My guess is not.

The Property Misdescriptions Act 1991 gives them a due diligence defence, if they asked the vendor for details of service charges and they told them, and had no reason to doubt it, they are off the hook.

The Misrepresentations Act 1967 is only applicable if the misrepresentation was fraudulent (i.e. they knew it was wrong and didn’t do anything it about it) again, I doubt this to be the case.

..and even if they were found guilty under PMA, the act makes no provision for recompense to the OP or any other buyer - only for the authorities to fine the agents.

tim123456789

googler wrote: »

..and even if they were found guilty under PMA, the act makes no provision for recompense to the OP or any other buyer - only for the authorities to fine the agents.

Are you sure?

I've certainly seen reports of buyers receiving compensation this way (though they are few and far between)

lessonlearned

This is a classic case of the buyer not doing their own due diligence. Either the buyer's solicitor or preferably the buyer himself should have double checked this with the Management Company to whom the charges are paid.

I'm afraid this one is down to Caveat Emptor. Buyer beware. Very harsh but true I'm afraid.

Yes I know you pay your conveyancer to check everything but they will only work with what they have, they won't go "digging".

pretamang

I've been in the same situation, my first attempt to buy a flat fell through when the terms advertised turned out to very different from the actual situation.

Unless you have already exchanged you won't get any compensation if the seller's ignorance or mistakes causes it to fail. It is very frustrating, and put my purchase back more than six months whilst I saved up to start the search all over again.

martinsurrey

tim123456789 wrote: »

Are you sure?

I've certainly seen reports of buyers receiving compensation this way (though they are few and far between)

they may have been through the Misrepresentations Act 1967, not the Property Misdesription Act 1991 ("PMA").

Googler is right that the PMA is purely a criminal act (punish), not a civil one (re dress).

rpc

lessonlearned wrote: »

This is a classic case of the buyer not doing their own due diligence. Either the buyer's solicitor or preferably the buyer himself should have double checked this with the Management Company to whom the charges are paid.

It sounds as if that is exactly what has happened.

EA say "£900 pa"

Solicitor sends off for management pack, packs says "£1800 pa in two installments"

The problem is that OP's son has incurred costs as a result of the incorrect information. If the EA has it in writing, they are clean and it is the seller that has misled.

That said, I can imagine the confusion that could occur if the seller was asked what the service charge was (honestly £900) and the EA did not clarify the frequency of payment (twice a year).

taxiphil

Lots of incorrect and outdated advice on this thread (much of it, worryingly, coming from practising Estate Agents).

The Property Misdescriptions Act 1991 has been superseded by the Consumer Protection from Unfair Trading Regulations 2008.

The latter traverses public and private law, and does give individuals the right to damages.

See here for the case mentioned by martinsurrey: the Estate Agent was fined £3,500 and ordered to compensate the complainant to the tune of £515.

Googler, have you read any of the information packs sent to you by your Ombudsman and/or the Office of Fair Trading over the last 2/3 years? I am genuinely staggered by your lack of knowledge of recent changes in the law.

(For those who are unaware, Googler is an Estate Agent)