Fraud Act 2006 and Vendors who pull out

A_Nice_Englishman

Do let us know how you get on, bgwuser.This is a fascinating subject

dmg24

bgwuser wrote: »

At last! Someone who realises there is a NEW law out there!! Intent does not have to be proved -merely the fact they made a false representation i.e. they said they had applied for retospective PP when they had not. AND the LA are progressing the application now as there is a need to regularise the problem. Thank you but we are off to the police station tomorrow as this is a criminal offence (and probably a civil one too).

2 Fraud by false representation
(1) A person is in breach of this section if he—
(a) dishonestly makes a false representation, and
(b) intends, by making the representation—

You really need to familiarise yourself with the legislation before taking this any further!

Intend has to be present in order for the offence to be proven.

silvercar

Due diligence, where the purchaser incurs costs to establish whether they want to proceed with purchase ie the purchaser has to do their own investigations and cannot rely on the word of the seller.

I still maintain, new law or not, that the seller and buyer are not liable for costs until exchange has happened. If that wasn't the case there would have been more fuss made of the impact of the new law. Hips was meant to make the process quicker to reduce the risk of people wasting money.

An estate agent told me recently that twice as many sales fail to exchange for personal reasons unconnected to the house condition.

bgwuser

Thanks to everyone for all their comments and we will certainly let you know how we get on. We are not hopeful regarding criminal action unless we get hold of someone who wants to have an interesting topic of discussion on their next promotion board. The local law college has also asked us to go in to chat with their students and facilitate a debate. I guess the lesson we have learned is not to take anyone at their word and get everything in writing before committing any cash. It will take a test case to see if the law can be applied to these circumstances but I think there are thousands of people out there who have been "victims" of buyers and vendors who are totally selfish.

CB1979_2

you could contact Richard Webster on here as well I believe he is a conveyancer/solicitor.

Curv

This is really interesting - can you legally savvy people answer this for me:

If acceptance of an offer is deemed to be 'representation', would the making of an offer also be deemed to be representation? And, if so, could it be deemed 'false representation' to make an offer on a property one only intends to buy if the purchase of another property falls through? 'Loss' to the vendor of the fall-back property being the potential loss of another (more 'genuine) purchaser if the property is removed from marketing activity following the offer.

kunekune

OK, so I am an academic criminal lawyer (disclaimer). It is difficult to know how this Act will work, because it is so new. But 'dishonesty' is a long-standing concept, giving us some idea. To have any chance of success you would need to show that the person you were trying to buy from was aware, at the time when they accepted your offer, that they were incapable of meeting the conditions of that offer. Knew, not just suspected, I think, though it isn't quite clear. Trouble is, that if they later realise, that might not be good enough. The critical time is when the contract was formed, you have to have 'mens rea' at the time when the 'actus reus' occurs. Ie, you have to have the dishonesty when the contract is made. Most sellers think, at the time, that it will all turn out ok. That's not criminal.

A_Nice_Englishman

Ok, what about this scenario. An estate agent tells the vendor that a buyer who has made an offer has a mortgage agreed in principle and the vendor accpets the offer and takes his property off the market. It later emerges that the buyer did not have a mortgage arranged and the sale falls through. Furthermore, the estate agent knew the buyer had previously been unable to get a mortgage because of their poor credit history and low income.

The estate agent, thinking the vendor is now desperate to sell, makes him an offer significantly below the price previously agreed. This offer is also below one that the estate agent had advised the vendor to reject.

Doozergirl

kunekune wrote: »

The critical time is when the contract was formed, you have to have 'mens rea' at the time when the 'actus reus' occurs. Ie, you have to have the dishonesty when the contract is made.

And it's well known that the contract only occurs when contracts are exchanged. Even if a contract was deemed to have been formed upon acceptance of an offer, then what possible motive could a vendor have for knowingly accepting an offer that they would renage on?

I still can't get past the point that the PP is entirely irrelvant in this case because it was simply no longer required, so the OP is simply clinging to the fact that the vendor withdrew from the sale?

That therefore means that anyone who pulls out of a sale is a criminal There is provision to claw back your losses in the case that a purchaser or vendor withdraws from sale after contracts are exchanged.

Most people are genuine when they can't proceed with a sale. How can people possibly go into a sale with the *intent* to deprive.

real1314

hmm

well, hving had a good read through and a bit of a re-read, I think a lot of people are mixing up the house purchase contract issue with the events that actually occurred, regardless of the purchase.

buyer makes offer, finds out there's a planning issue.

buyer says: resolve planning issue before we confirm offer.

vendor says: we've been to planning, they will have it thro in 2-3 weeks

buyer commissions survey.

the "contract" in this case seems to be between the buyer and vendor relating to the submission of a planning applic and the commission of the survey, however the OP would have to establish that the vendor KNEW the buyer would get a survey even though they "lied" (?) about the PP Applic.

In most cases these things happen due to a change in the vendors circumstances, but in this case it seems that the vendor stated something that they knew was not true. Hence they knew at the time they stated it, that they had NOT applied for PP, but they told the buyer they HAD.

There's your false statement.

As for the loss, there's a clear financial loss to the buyer/OP in paying for a survey they would not have paid for without the false statement, and one could argue that they wanted to "gain" a successful survey valuation, which although not a financial gain, could constitute a gain in knowledge of the vlaue of their home; after all, you can market a home for anything you like but a survey puts that valuation on a better footing.

could be interesting, but doesn't compare directly to most sales falling through.