Estate Agent almost sold us part of a property that wasn't even for sale, what should we do?

Pixie5740

MDalgarno said:

My partner and I are very close to exchanging contracts for a leasehold flat. We thought we were buying the loft along with the top floor flat but we've now been told (after spending over £1,500 in fees) that the loft is not included. Throughout all the estate agent documents and property listing provided prior to putting in our offer it mentioned the loft as part of the purchase, i.e. it was part of the floorplan, it was included in the square footage quoted for the property, and we were specially shown around it during our viewings. It was also included in the Homebuyer Survey, which of course influenced our mortgage valuation.

We have now learnt that the loft is not included in the purchase/deeds, and as the only access is through the flat we are buying, we have been advised that the landlord can make use of this loft space and require access at any time. I know it won't count for much but we did verbally question whether the loft was included during the viewing and at no point were we told by the estate agents that it wasn’t. We may now decide not to carry on with the purchase but will have lost money.

Our solicitor has suggested requesting a Deed of Variation but this will again incur more costs with no promise of actually being accepted. It seems like the estate agents believed the loft was included which leads us to believe that the guide price that we offered may actually be over market value if you take away to loft from the purchase. 

What can we do?

I'm not sure the estate agent has lied.  Estate agents tend to go off what their clients tell them at face value and don't do any fact checking.  If the vendor said the loft it included in the lease then the estate agent advertised it as being included.  Much like the threads we sometimes see where the length of the lease isn't as advertised and only comes to light when the solicitor starts working or that a property advertised as freehold is actually leasehold.  All these things (I think because I'm not very familiar with the leasehold nonsense south of the border) can be found out in advance from purchasing a copy of the lease from the Land Registry for £3 or some small amount like that.

Don't get me wrong, I can see that this is a disappointing development in the purchase, but if you choose to purchase somewhere else you now know you could save yourself the heartache and money by gathering information about the property yourself for a few quid before splashing out on solicitors and surveys.

As for the estate agent they should be registered with either The Property Ombudsman (TPO) or the Property Redress Scheme (PRS).  Each has a code of practice for its members.  Below is taken from the TPO's code of practice:

Published Material and Information about a Property
7i You must by law comply with the Consumer Protection from Unfair Trading Regulations 2008 (or the Business Protection from Misleading Marketing Regulations 2008 where applicable). The Consumer Protection from Unfair Trading Regulations 2008 require you to disclose any information of which you are aware or should be aware of in relation to the property in a clear, intelligible and timely fashion and to take all reasonable steps to ensure that all statements that you make about a property, whether oral, pictorial or written, are accurate and are not misleading. All material information (*) must be disclosed and there must be no material omissions which may impact on the average consumer’s (*) transactional decision (*). Where information is given to consumers and/or their representatives, it must be accurate and not misleading.

7j Prior to commencement of marketing, the written details of a property (sales particulars) must be agreed with the seller to confirm that the details are accurate. Sales particulars that have not been agreed by the seller must be marked as ‘draft’, ‘subject to approval’ or similar to ensure buyers are aware that the property details could be subject to change.

You could follow the estate agent's complaints process and then escalate to whichever scheme the estate agent is registered with if you are unhappy with the EA's response to your complaint.  The TPO or PRS can then get the Advertising Standards Agency (ASA) involved as one renter did for a letting agency in Liverpool.

https://www.asa.org.uk/rulings/castle-estates--liverpool--ltd-a17-380500.html

Naff all happened to the letting agency.  They were asked not to advertise the property in that way again.

The ASA can then in turn get the Committee of Advertising Practice (CAP) involved.  Will any of this get your £1500 back?  Doubtful.  I do wish EA would substantiate what clients are telling them before advertising the property.  It is one of the things I like about the Home Reports in Scotland you already know things like if the loft conversion is hooky and what valuation the mortgage lender will use before you even go and view the property. 

eddddy

NameUnavailable said:

You won't get any compensation. The agents particulars will have a disclaimer about needing you to verify any details with your legal representatives.

Those disclaimers aren't valid.

One route you can investigate is....

Most estate agents are members of the Property Ombudsman Scheme. The Ombudsman says:

As detailed in paragraph 7i of the TPO Code of Practice for Residential Estate Agents, the Agent had an obligation to ensure that all statements that they made about the property, whether oral, pictorial, or written were accurate and not misleading and that all material information was disclosed. 

Link: https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/outline-outdoor-ownership-leasehold-rooftop-terrace

Here are 3 cases where the Ombudsman awarded compensation - twice when the EA incorrectly said a loft was included, and once where the EA incorrectly said a roof terrace was included.

In these cases the compensation was only £250 or £500, but the Ombudsman sometimes awards compensation to cover all a buyer's costs. (But every case would  be considered on its facts.)

https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/loft-not-included-misleading-action
https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/who-owns-the-loft
https://www.tpos.co.uk/news-media-and-press-releases/case-studies/item/outline-outdoor-ownership-leasehold-rooftop-terrace

GDB2222

Before pulling out, I suggest that you tell the sellers that you will continue with the purchase provided they get a deed of variation, at their expense. 

That way, you should be getting exactly what you thought you were getting.

I have no idea whether the sellers were pulling a fast one, or maybe they genuinely thought they had use of the loft. I very much doubt that the freeholder came round to store stuff in it, so in practice they were more or less right. 

Is this in Scotland? Do you even have freeholders?

user1977

Pixie5740 said:

 It is one of the things I like about the Home Reports in Scotland you already know things like if the loft conversion is hooky and what valuation the mortgage lender will use before you even go and view the property. 

But even a Home Report doesn't involve anybody actually looking at the title deeds. There's a seller's questionnaire, which includes a few title points but only so far as the seller is aware (and often it's clear they don't have a clue). It includes a valuation, but that's just based on whatever the surveyor has assumed. The surveyor might flag up things for a solicitor to look at, like alterations or suspicions about the legal extent of the property, but they're not going to make their own investigations and tell you the answer.

We've had previous threads where people have suggested the estate agents ought to make their own investigations into the extent of the property (or title conditions, or the terms of the lease, or whether their client actually has the right to sell) rather than rely on what they've been told by their client, but nobody's explained how that would operate in practice. Presumably the EA, before marketing, would first need to instruct their own solicitors to give them a title report. Who's paying for that? Is it going to be worthwhile?

user1977

GDB2222 said:

Is this in Scotland? Do you even have freeholders?

We don't, but the OP hasn't suggested they're in Scotland.

GDB2222

user1977 said:

Pixie5740 said:

 It is one of the things I like about the Home Reports in Scotland you already know things like if the loft conversion is hooky and what valuation the mortgage lender will use before you even go and view the property. 

But even a Home Report doesn't involve anybody actually looking at the title deeds. There's a seller's questionnaire, which includes a few title points but only so far as the seller is aware (and often it's clear they don't have a clue). It includes a valuation, but that's just based on whatever the surveyor has assumed. The surveyor might flag up things for a solicitor to look at, like alterations or suspicions about the legal extent of the property, but they're not going to make their own investigations and tell you the answer.

We've had previous threads where people have suggested the estate agents ought to make their own investigations into the extent of the property (or title conditions, or the terms of the lease, or whether their client actually has the right to sell) rather than rely on what they've been told by their client, but nobody's explained how that would operate in practice. Presumably the EA, before marketing, would first need to instruct their own solicitors to give them a title report. Who's paying for that? Is it going to be worthwhile?

Just to play the devil’s advocate for a moment, it’s all very well to say that it is not worth while checking the advertisement details are correct, but there then ought to be some compensation for buyers who lose money because the details turn out to be wrong. 

eddddy

user1977 said:

We've had previous threads where people have suggested the estate agents ought to make their own investigations into the extent of the property (or title conditions, or the terms of the lease, or whether their client actually has the right to sell) rather than rely on what they've been told by their client, but nobody's explained how that would operate in practice. Presumably the EA, before marketing, would first need to instruct their own solicitors to give them a title report. Who's paying for that? Is it going to be worthwhile?

For England and Wales, the Property Ombudsman says that EAs should:

In accordance with paragraph 5e, where the title is registered at HM Land Registry, you should seek to obtain title information to verify the tenure of the property.

So that's just a £3 fee to download that info from the LR website for the EA to do a cursory check.. I don't think there's an expectation that the EA does any more than that.

TBH, it might be sensible for the EA to download the title plan for an extra £3 - to check for issues like loft ownership, leased gardens etc. But the Ombudsman doesn't mention that.

tooldle

I sold fairly recently. My estate agent drafted up the particulars using the information I provided. Our contract stated that I would be asked to check the draft document, hi-light any necessary amendments and sign to approve the final document. The responsibility for an accurate description rested with me as the vendor.

user1977

GDB2222 said:

user1977 said:

Pixie5740 said:

 It is one of the things I like about the Home Reports in Scotland you already know things like if the loft conversion is hooky and what valuation the mortgage lender will use before you even go and view the property. 

But even a Home Report doesn't involve anybody actually looking at the title deeds. There's a seller's questionnaire, which includes a few title points but only so far as the seller is aware (and often it's clear they don't have a clue). It includes a valuation, but that's just based on whatever the surveyor has assumed. The surveyor might flag up things for a solicitor to look at, like alterations or suspicions about the legal extent of the property, but they're not going to make their own investigations and tell you the answer.

We've had previous threads where people have suggested the estate agents ought to make their own investigations into the extent of the property (or title conditions, or the terms of the lease, or whether their client actually has the right to sell) rather than rely on what they've been told by their client, but nobody's explained how that would operate in practice. Presumably the EA, before marketing, would first need to instruct their own solicitors to give them a title report. Who's paying for that? Is it going to be worthwhile?

Just to play the devil’s advocate for a moment, it’s all very well to say that it is not worth while checking the advertisement details are correct, but there then ought to be some compensation for buyers who lose money because the details turn out to be wrong. 

Compensation from whom though? If the EA, then like I said, they're not going to take on that liability without first carrying out their own checks. Which would add probably a few hundred quid to the process, presumably payable by the vendor?

user1977

eddddy said:

user1977 said:

We've had previous threads where people have suggested the estate agents ought to make their own investigations into the extent of the property (or title conditions, or the terms of the lease, or whether their client actually has the right to sell) rather than rely on what they've been told by their client, but nobody's explained how that would operate in practice. Presumably the EA, before marketing, would first need to instruct their own solicitors to give them a title report. Who's paying for that? Is it going to be worthwhile?

For England and Wales, the Property Ombudsman says that EAs should:

In accordance with paragraph 5e, where the title is registered at HM Land Registry, you should seek to obtain title information to verify the tenure of the property.

So that's just a £3 fee to download that info from the LR website for the EA to do a cursory check.. I don't think there's an expectation that the EA does any more than that.

TBH, it might be sensible for the EA to download the title plan for an extra £3 - to check for issues like loft ownership, leased gardens etc. But the Ombudsman doesn't mention that

And that assumes it's a nice straightforward registered title where the answers are obvious. Plenty of previous threads here with genuine dubiety about boundaries, title conditions, title to sell etc. We don't generally expect laypeople to reliably interpret titles - that's why everybody else in the process employs professionals.