A death by 1000 cuts

HannahMarie1987

Hi, need some advice please. I completed on a property recently after an extremely long process. My offer was made in October 2023 and the transaction took over a year to complete. The reason for the delay is because the Agent advertised the property as:

1. Being Share of Freehold when at the time it was only Leasehold  (and the Agent intended to convert the Freehold title convert the property to Share of Freehold during the process but never advertised this)
2. Having a length of lease of 990 years when the lease was only 70 years (and never disclosed this)
3. Having a basement when the basement was not legally on the title at the time of advertising and needed to be added (also not disclosed).
4. The property also had a number of charges/restrictions on the title from the sellers ex wives that needed to be resolved which also werent disclosed in the advertisement and took a long time to resolve..

The Agent also knew 1, 2 and 4 as they downloaded the Leasehold Title prior to advertising, so knowingly misrepresented the property. With 3 the Agent never checked but relied on the Seller. 

The Agent also advertised the property as being 70% bigger (compared to the EPC) than in practice, but relied on a 3rd party for this. 

Additionally the Agent did not provide any communication for the first 7 months updating me with what was happening. All this information was drip fed to me, and was really a death by 1000 cuts experience. I had a continual hope that the property would complete shortly, which was never realised. 

All this has increased my legal costs substantially and obviously the delays have caused a lot of stress. 

It should be noted that when negotiating the price at the end, the Agent said that because house prices have increased, this benefit should be used to offset the increased (many thousands) legal costs I incurred, effectively giving this benefit to the owner when it is a benefit I should have received. As such I never received this benefit.

The thing is - if I had known all of this, I never would have made an offer on the property as I had strong reasons for requiring a quick transaction at the time. . 

I am thinking of complaining to the Estate Agent and the Property Ombudsman on the basis that my Transactional Decision (on how and what terms to offer on the property was materially impacted) and as such I have missed out on the opportunity cost (the benefit of increased house prices) of another property that would have settled in half the time. And incurred additional legal costs as a result. 

Does this seem like a reasonable argument with a chance of success?  Anything I should be concerned about?

HannahMarie1987

I should add that I chose this property because both parties where chain free and I required a quick transaction. 

gwynlas

You can complain but what are you hoping for as a resolution?

DE_612183

I don't think you can argue for "missed out" money from a property increase in value - at the end of the day you continued with the process and you could have stopped at any time.

In terms of "the agent" - you don't have a contract with them so not sure where you stand trying to get money out of them - anything would be a gesture of good faith.

You can go to the association that the agent belongs to - but again I think they would probably just warn about future conduct, or throw them out - I doubt they would do anything about compensation - but you never know. 

HannahMarie1987

gwynlas said:

You can complain but what are you hoping for as a resolution?

There is a missed opportunity cost caused from impact on my Transactional Decision that resulted from the Agent's omission of material information.

HannahMarie1987

DE_612183 said:

I don't think you can argue for "missed out" money from a property increase in value - at the end of the day you continued with the process and you could have stopped at any time.

In terms of "the agent" - you don't have a contract with them so not sure where you stand trying to get money out of them - anything would be a gesture of good faith.

You can go to the association that the agent belongs to - but again I think they would probably just warn about future conduct, or throw them out - I doubt they would do anything about compensation - but you never know. 

Thanks.. you dont think an opportunity cost can be considered as a loss? Also... I had to pay additional legal costs, surely these need to be repaid?  And yes... no contract with the Agent, but the Agent is bound by their requirements under the TPO, which includes requiring them to follow Consumer Protection Regulations - so they in effect becomes the binding contract that protects me (and consumers in general).

HannahMarie1987

HannahMarie1987 said:

DE_612183 said:

I don't think you can argue for "missed out" money from a property increase in value - at the end of the day you continued with the process and you could have stopped at any time.

In terms of "the agent" - you don't have a contract with them so not sure where you stand trying to get money out of them - anything would be a gesture of good faith.

You can go to the association that the agent belongs to - but again I think they would probably just warn about future conduct, or throw them out - I doubt they would do anything about compensation - but you never know. 

Thanks.. you dont think an opportunity cost can be considered as a loss? Also... I had to pay additional legal costs, surely these need to be repaid?  And yes... no contract with the Agent, but the Agent is bound by their requirements under the TPO, which includes requiring them to follow Consumer Protection Regulations - so *THIS* in effect becomes the binding contract that protects me (and consumers in general).

Corrected Typo

eddddy

To be honest, based on past TPO decisions, I think TPO would look at it like this...

• The estate agent may (or may not) have omitted material information and/or given misleading information - which would  impact a reasonable consumer's decision to purchase.

• But you found out all the true information before you exchanged contracts - so you had the opportunity to reduce your offer, or walk away, when you found out 'the truth'.

• However, you decided to proceed, even with full knowledge of all the issues

So in TPO's eyes - you haven't suffered a financial loss as a result of the estate agent's actions.

(You kind of suggest that the estate agent 'bullied' you into proceeding at a particular price - but unless it amounts to 'coercion', I doubt you have much of a case with that.)



The situation might be different, for example...

• If you found out about the estate agents omissions / misleading info - and you walked away as a result of that. Then TPO might agree that you've suffered the financial loss of solicitors fees, survey fees, etc, etc

• If you found out about the estate agents omissions / misleading info after exchange of contracts or after completion - and as a result, you realise that the property is worth less than you thought

But you can still complain to TPO about the estate agent's 'behaviour' and that they didn't treat you fairly. TPO sometimes tells estate agents to pay compensation to buyers for 'unnecessary aggravation'  - but it tends to be around £250.

MEM62

HannahMarie1987 said:

All this has increased my legal costs substantially and obviously the delays have caused a lot of stress. 

HannahMarie1987 said:

The thing is - if I had known all of this, I never would have made an offer on the property as I had strong reasons for requiring a quick transaction at the time. . 

Taking both hose statements into account, the prudent course of action would have been to pull out and look for something else.  

The issue with the estate agent is that they do not work for you and you have no contract with them.  They have no obligation to you.  In addition, you must satisfy the yourself that any property details that they provide to you are accurate.  Any estate agent, even if reputable, relies heavily on what they are told by the seller and do not verify much of the information.    

ReadingTim

You can't claim for consequential loss as you don't have a contract with that Agent for them to breach, and even if you you did, it's excluded from most contracts anyway.  

HannahMarie1987

eddddy said:

To be honest, based on past TPO decisions, I think TPO would look at it like this...

• The estate agent may (or may not) have omitted material information and/or given misleading information - which would  impact a reasonable consumer's decision to purchase.

• But you found out all the true information before you exchanged contracts - so you had the opportunity to reduce your offer, or walk away, when you found out 'the truth'.

• However, you decided to proceed, even with full knowledge of all the issues

So in TPO's eyes - you haven't suffered a financial loss as a result of the estate agent's actions.

(You kind of suggest that the estate agent 'bullied' you into proceeding at a particular price - but unless it amounts to 'coercion', I doubt you have much of a case with that.)



The situation might be different, for example...

• If you found out about the estate agents omissions / misleading info - and you walked away as a result of that. Then TPO might agree that you've suffered the financial loss of solicitors fees, survey fees, etc, etc

• If you found out about the estate agents omissions / misleading info after exchange of contracts or after completion - and as a result, you realise that the property is worth less than you thought

But you can still complain to TPO about the estate agent's 'behaviour' and that they didn't treat you fairly. TPO sometimes tells estate agents to pay compensation to buyers for 'unnecessary aggravation'  - but it tends to be around £250.

Thanks Eddie, I appreciate the time you took to respond. I think from my side, its not the decision to purchase - it had taken so long and I continually had the impression the property would complete sooner than finding another property and going through the process. The problem is the decision to make an offer, which is included under the TPO's COP. 

There is no doubt this was impacted, I would not had put an offer on the property had I known the above. Question then is, what financial impact / loss have I felt from putting this offer in, when I wouldnt have done so had I known the above. 

I do think there is an opportunity cost of increased house prices that I would have received from another property that wasnt realised (particularly as the increase in house prices was given to the vendor to use as a negotiation chip to offset the additional legal costs I incurred). And of course all the additional legal fees that resulted from these omissions.  I welcome your views on this.