Fraud Act 2006 and Vendors who pull out

merlinthehappypig

Having followed this with interest, it seems strange to me that the EA/vendor would effectively admit liability by refunding the survey fees.

On this basis the OP could presumably claim all manner of other 'costs' involved with the aborted purchase. I have to say that this doesn't feel quite right. Apologies if I am being cynical.

bgwuser

The reason why we think our claim was viewed as "reasonable" and therefore able to be settled without recourse to the courts is that we did not inflate the claim and we took immediate steps to prevent any further losses. We just wanted the survey fee refunded and that is why we were initially so angry when they ignored our written request. We felt we were being entirely reasonable. It has all been settled amicably without us incurring legal fees. It cost the price of 2 registered letters and a bit of our time. The rest of it we put down to the hassle of house buying and we are sure there is a better house waiting for us. We have just been offered 2 houses which have been reduced in price by 50,000 and 60,000 since we first viewed them 2 months ago. The original house is also probably worth less now.

real1314

chriseast wrote: »

Having followed this with interest, it seems strange to me that the EA/vendor would effectively admit liability by refunding the survey fees.

On this basis the OP could presumably claim all manner of other 'costs' involved with the aborted purchase. I have to say that this doesn't feel quite right. Apologies if I am being cynical.

I'm not sure if the OP has said this, or not, but I';d be farily sure that the payment was issued on a "goodwill" basis.
Much like M&S policy on returned goods - it's all goodwill and none of it creates any precedent.

rosysparkle

If this is not a troll (I reserve judgement), then I very much doubt that the EA has admitted any liability. What they will have done IMO is consider that they have a complaining customer. It costs time and money to respond, if they pass the complaint to the PI insurers then their premium jumps even higher next year. The PI excess is (say) £5k, so they will think it is worthwhile to refund the survey cost, reclaim the VAT, shut the complainant up, move on.

bgwuser

Rosysparkle - you are a star. That is exactly what the EA has done. But an innocent EA would have let it go to the EA Ombudsman (as that was our first port of call) which would have been a minimal inconvenience for them. We recouped our money and we still feel we have won a victory for genuine house hunters in the locality of this EA.

rosysparkle

No, even an innocent EA would have assessed the cost in terms of time, money and increased PI premiums in defending a case, and may well have decided that refunding a survey fee was the cheapest way to deal with this.

Dealing with the NAEA or the ombudsman is not a matter of minimal inconvenience, far from it! And may result in increased PI premiums, even if no action is taken.

You might not be aware that any complaint which may result in a court case MUST be reported to the EA's PI insurers. PI insurance premiums, which are ruinously expensive to start with, may go up if more than a certain number of claims are reported to them, even if no action is taken by the PI insurers and even if none of the claims are justified.

Sometimes refunding a few hundred pounds is the cheapest way of dealing with an unjustified complaint.

Altarf

An interesting read. A few links that I found made further interesting reading -

http://www.bcs.org/server.php?show=ConWebDoc.11572
http://www.wikicrimeline.co.uk/index.php?title=Fraud_Act_2006

For Estate Agents, the problem would seem to be that if they lie (or even omit to mention something relevant), then there is a possibility that they might have committed fraud. An interesting concept, Estate Agents not being able to lie or at least tell half-truths.

In respect of the Estate Agent's relationship with the seller who has engaged them to sell their property at the best possible price, the situation looks fairly clear.

4 Fraud by abuse of position

(1) A person is in breach of this section if he—

(a) occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person,

(b) dishonestly abuses that position, and

(c) intends, by means of the abuse of that position—

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

(2) A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act.

The Estate Agent is clearly in a position that they should not do anything that is against the vendor's financial interest. So if they dishonestly did anything that either profited the EA at the expense of the vendor or put the vendor at risk of losing money, it might be considered fraud.

For example, telling a vendor that a potential buyer has their mortgage sorted when they haven't, may expose the vendor to a risk of loss that they wouldn't have been in, if they knew the truth.

For purchasers, an Estate Agent's relationship is a strange one. Purchasers forget that they are employed by the vendor to obtain the best price possible for their property, and that the EA is not their friend. However it might be considered that the EA is occupying a position of trust, since the work that EAs carry out is subject to legislation, and that they should not be expected to behave dishonestly to purchasers.

For example, if a property had two offers and the vendor wanted a contract race, but asked the EA not to tell either potential purchaser, then it might be considered fraud by the EA, as it would put the potential purchasers at the risk of loss.

For either the vendor or purchaser, saying something which they know to be untrue, again might be considered fraud if it exposed the other party to a risk of loss. Interestingly, unless there is a legal requirement to disclose, then failure to disclose something would not be considered fraud.

So in the OP's case, if the vendor and the EA made a statement that they knew to be a lie, they might very well have fallen foul of this fairly widely drafted law. I can see why the EA in the OP's case might have made an ex-gracia payment to avoid ending up being the test case.

However going back to the title of this thread, Fraud Act 2006 and Vendors who pull out, I cannot see that the Fraud Act has any relevance where either the buyer or seller just changes their mind, even though it leaves the other party with costs.