Estate Agents -material information disclosure

Sazot

We are in the process of buying an empty house (aim for simultaneous sale/completion).
 

Our offer was accepted around 17.5.25. We were told by the vendors estate agents that a previous sale had fallen through a few months before “for personal reasons, nothing to do with the house - all is in order”.

Last week the vendors solicitors. Finally confirmed that the reason the sale fell through was due to having no sign off from local building control for an extension built in 2023. This in itself has generated a number of concerns as there has still not been obtained or attempts made to address this.

Had we known about this, we would not have proceeded with the purchase and looked elsewhere.

We are now heavily financially and emotionally involved in the process. At this point, trying to work out next steps. 

The estate agents (who handled the initial sale that fell through) have blatantly lied to us. 

My question is does this constitute a material non disclosure under The Consumer Protection? 

Moreover, why would the estate agent market a property and allow the sale to proceed in the knowledge that it cannot be completed (certainly not by any sane person) without this sign off documentation? 

I know that I need to lodge a complaint with the EA and potentially proceed to the ombudsman but interested to get others comments on this. 

pinkshoes

The EA and the solicitor are not the same entity. The EA likely did not know why the buyer pulled out. The solicitor might not have passed down this info. 

It would be very difficult to prove that the EA knew this.

Can you not get some sort of indemnity insurance?

20122013

I am not expert but when I look into  'indemnity insurance' it is not very easy to make a claim, so I had not bother with it.  You can try to complaint to the EA and then to their Ombudsman but I am not sure you will get any financial compensation though.   Aim not to spend too much of your time on this, if you do not have evidence, as some EA are not as factual as they can be and also they will have disclaimers. 

Is your solicitor no sell no fee? and their fee is due on Completion not exchange?  Good luck.

david29dpo

I feel for you as agents are renowned for lying just so they get there commission.
The problem is proving it.
 

Sazot

pinkshoes said:

The EA and the solicitor are not the same entity. The EA likely did not know why the buyer pulled out. The solicitor might not have passed down this info. 

It would be very difficult to prove that the EA knew this.

Can you not get some sort of indemnity insurance?

Thanks for your response. 

We were very specifically told that the resin for the last sale falling through was for personal reasons and not anything related to the house. That seems odd to me and if they didn’t know, why not say?

What would the indemnity insurance be for? We are very far down the line. Our sale is good to go, it’s the purchase holding things up.

Sazot

20122013 said:

I am not expert but when I look into  'indemnity insurance' it is not very easy to make a claim, so I had not bother with it.  You can try to complaint to the EA and then to their Ombudsman but I am not sure you will get any financial compensation though.   Aim not to spend too much of your time on this, if you do not have evidence, as some EA are not as factual as they can be and also they will have disclaimers. 

Is your solicitor no sell no fee? and their fee is due on Completion not exchange?  Good luck.

Thanks for you response.
You are right need to focus on next steps. Just feeling very angry and taken for fools.
Sadly not re.sols but not their fault either. The whole process in England is broken.

Sazot

Sazot said:

pinkshoes said:

The EA and the solicitor are not the same entity. The EA likely did not know why the buyer pulled out. The solicitor might not have passed down this info. 

It would be very difficult to prove that the EA knew this.

Can you not get some sort of indemnity insurance?

Thanks for your response. 

We were very specifically told that the resin for the last sale falling through was for personal reasons and not anything related to the house. That seems odd to me and if they didn’t know, why not say?

What would the indemnity insurance be for? We are very far down the line. Our sale is good to go, it’s the purchase holding things up.

Reason not resin! 

pinkshoes

Sazot said:

pinkshoes said:

The EA and the solicitor are not the same entity. The EA likely did not know why the buyer pulled out. The solicitor might not have passed down this info. 

It would be very difficult to prove that the EA knew this.

Can you not get some sort of indemnity insurance?

Thanks for your response. 

We were very specifically told that the resin for the last sale falling through was for personal reasons and not anything related to the house. That seems odd to me and if they didn’t know, why not say?

What would the indemnity insurance be for? We are very far down the line. Our sale is good to go, it’s the purchase holding things up.

Indemnity insurance might mean you can proceed and get the building signed off later, and any issues that need fixing will be covered. 

Lots of people walk away from purchases without giving a specific reason.

Focus on progressing. The owner needs to get this signed off. It depends why it didn't get signed off. The extension could have been built under permitted development and they just never got round to it so it could be relatively straightforward. 

Or the building inspector might flag up huge problems, in which case you'll need to either complete your own sale and rent, or reassess what you want to do.

WIAWSNB

Hi Sazot.
How much do you still want the house? How happy are you with the quality of extension build? Did your survey pick up any concerns with it?
I'm not sure how well an indemnity policy will cover you here - I just don't know. My concern is that Planning/Build Control will know about it, possibly due to enquiries prompted by the sale, so may have in mind to investigate at some point? Or, if the policy is called on, BC will let them know they were aware from the off.
Do you have a case against the EA? Most likely 'yes', if you can prove they knew. How can you do that? Dunno, but I guess if the vendor 'fesses that they told them, or if you find the pulled-out buyer. You might them be able to persuade the EA to cover your pull-out conveyancing costs to date, or you'll have to report them.
Keep the emotive out of it. Aim for the prize, if you still want it.
What you can say is that the EA does now know, since you've told them. Therefore, if you pull out, then they 'must' declare this issue going forwards. On that basis, has the house's value changed? Can you negotiate a discount that would let you continue with the purchase?
In short, what is it you now want?
What's the actual story behind the lack of completion cert? Was PP - if required - applied for? Was BC? Did the BCO come out at any point, say to check the founds? And what are the remaining 'issues' with the build that needs resolving?
BCOs are usually not unreasonable folk. If, say, they were involved at the start, passed the foundations and other possible stages, but are not convinced/have evidence of later elements, then a builder should be able to give you ballpark figures for sorting them. 
Eg: level of insulation - 'inspection would be ~£200 (perhaps some holes and endoscope), but to bring up to standard if not compliant £6k'. That sort of thing. 
You then make your call. 

eddddy

There are lots of factors to consider, here are just a few of them...

In simplified terms, the situation is as follows...

• If the estate agent knew (or should have known) about the lack of building regs causing a previous sale to fall through - they probably should have told you. Failing to do so would probably be a breach of consumer protection legislation

• If the estate agent was dealing with the previous sale, they would almost certainly know

• If they're a new estate agent, they should have asked the seller about previous fallen through sales. (But it's possible that the seller lied.)

Now you have found out, what do you want to do?

• 1) Walk away from the purchase - because of the lack of building regulations

• 2) Continue with the purchase - perhaps renegotiating the price with the seller

If it's option 1, the property Ombudsman might order the estate agent to pay you compensation to cover your lost legal, survey and mortgage application fees.

If it's option 2, you know about the lack of building regs and you are choosing to proceed, so you have suffered no loss, so no compensation would be due.


(But as I say, there will be other factors to consider...)

ian1246

If you do proceed ahead with the purchase via an indemnity policy, under absolutely no condition should you contact the council or local planning authority - you will invalidate the Policy.

You also need to satisfy yourself that noone else has either. That means specifically asking - via your solicitor to their solicitor- for confirmation nothing has been done by previous parties (including previous buyers) which could invalidate the Policy.

Thirdly, I'd be looking up the property planning portal to see if for whatever reason a planning application was put in & also whether there was planning control involvement (which will show on the planning control portal?) & its just that they refused to sign the extension off.

If either of these show knowledge by the local authority about the extension, your indemnity will be a waste of paper & I'd be walking away - unless the buyer knocks the price of rebuilding the extension off the purchase price.