Not standard construction - claim against estate agent

revinkevin

I recently attempted to purchase a property through an estate agent. After paying a mortgage broker fee and a survey fee the survey revealed the house was not of standard construction. The lender would therefore not lend on the property so I had to pull out. Do I have a claim against the estate agent for costs incurred?

It is my understanding the days of buyer beware are (almost) over when it comes to purchasing property and estate agents have to disclose what they know about the property. This includes for instance previous bad surveys, grievances with neighbours, recent nearby planning applications etc.

The wording in the property ombudsman's guidelines does not explicitly mention property construction. The part that interests me is their definition of "material information" and marketing literature.

Published Material and Information about a Property
...require you to disclose any information of which you are aware or should be aware of in relation to the property.....

The estate being knowledgeable of the area were in my opinion, probably aware that the property was not of standard construction.. I have no way of knowing if previous surveys revealed the construction type. I do know that I have informed the estate agent and they have not disclosed this on their more recent marketing material.

From the evidence that I have (i.e. none) is the estate liable for not disclosing the type of construction. in other words, is it their job to know this? I realise they are not surveyors, but the construction type of a property is an integral part of the product they are selling (and so yes, next time I will ask first!!!).

Thanks

Chanes

You would have to prove your claim and you'll find the estate agents contract are so nebulous that a heap of money would be spent on a solicitor just working out the likeliest chance of success.

I feel we were served badly by an agent but to chase them legally would be disproportionate to what I'd spent already.

Good luck if you fancy a run at them, just don't throw good money after bad.

Davesnave

revinkevin wrote: »

From the evidence that I have (i.e. none) is the estate liable for not disclosing the type of construction. in other words, is it their job to know this?

You have answered your own question.

You have no direct evidence of what the agent knew when marketing the property. As mere marketing middle-men/women, it isn't the EA's job to know about building construction.

Presumably after you make them aware, they will have a duty to disclose what you tell them, but it's is no different from, say, structural issues arising from a survey. These might also be apparent to the reasonably trained eye, but won't be in the blurb, unless the vendor and agent want them there. e.g. to discourage time wasters.

Also, somewhere in the EA's bumph about the property, there will be a disclaimer, advising you not to rely on the information therein.

revinkevin

Thank you for your reply. You have in fact summarised the most important question:

"it isn't the EA's job to know about building construction"

Or isit? That is the foundation of my potential argument. Any disclaimers do not bother me, as they have to adhere to the property ombudsman's guidelines regardless. I can't prove what they do or don't know (although I intend to speak to the vendor to see if previous surveys have been carried out). What I want to establish is what they 'should' know. From the ombudsman's definition of material information, I may be out of luck.

18k Material Information. In the most straightforward sales, the material information that
you should give to potential buyers may be quite basic. Little more than the asking price,
location, number and size of rooms, and whether the property is freehold or leasehold.
However, depending on the circumstances of each sale, material facts could include the
length of the lease, the level of charges payable under a lease, uncertainties known about
title, major structural defects, lack of connection to mains services, etc. At the outset of
the marketing process, you are not expected to research issues that are outside your line
of business, for example, where your business is marketing property and the issues are
ones that a surveyor or conveyancer would investigate. However, should you become
aware of such information later on, you cannot ignore or suppress it. If the information
is material, you will need to disclose it.

I would be interested to hear from anyone with similar experiences.

googler

According to the Consumer Protection Regulations, which replaced the Property Misdescriptions Act, they should (broadly speaking) be making buyers aware of anything the 'average person' would take into account when making their buying decision, where such things are known to them.

I'll leave you to decide how clear, or how vague, that is.

Davesnave

Although your lender would not lend on this property, there might be others that would, depending on the type.

BISF houses where I used to live were regularly bought by first time buyers, at least until 2010, though I have no recent knowledge about this.

Another poster on here asked recently whether a particular property was a Wimpey no fines house, and much discussion followed, so these matters aren't always clear-cut.

In other words, there are different types of 'non-standard' construction, an element of confusion about them among "average persons" and different attitudes towards lending on them.

Quite a minefield!

revinkevin

Without going into too much detail, I was making a buy to let purchase and the lending criteria on BTL mortgages can be stricter than residential mortgages. In fact, my broker could not find a suitable lender. Only 1 of 31 would lend but on silly terms. And even if another lender could be found, the initial broker fee and survey fee would still be lost.

lincroft1710

revinkevin wrote: »

At the outset of the marketing process, you are not expected to research issues that are outside your line of business, for example, where your business is marketing property and the issues are ones that a surveyor or conveyancer would investigate.

I think this says everything

As you have not said what type of non-traditional construction is involved, we don't know if it is glaringly obvious, e.g. concrete "Airey home" or a cedarwood bungalow, or less apparent such as Wimpey "no-fines", "cross wall" construction or brick skinned "Airey" or pre-fab.

revinkevin

In this case the construction type was determined to be Wimpey "no-fines".

stator

It's worth making a formal complaint but I wouldn't get your hopes up.
Wimpey no-fines is acceptable to most lenders so that's probably why the estate agents left it out. They probably didn't know that BTL mortgages aren't available.

To be honest I think a lot of people living in Wimpey no-fines houses probably aren't even aware of it.

System

The first thing that came to mind is that unless the property type was explicitly stated, the property wasn't actually wrongly described.

The second thing that came to mind is that the EA might turn around and point the finger at you. You failed to secure lending yet s/he probably has other buyers that did secure lending.