During the course of a purchase, it is no doubt that the buyer and their solicitor will want to know as much as possible about the property being sold. They will raise enquiries which you, as the seller, may not necessarily know the answers to.
To assist in this process, there are specific forms which are used to uncover potential areas of concern. With residential properties this is the Property Information Form (TA6) and with commercial properties it will be the Commercial Property Standard Enquires forms (CPSEs).
In both circumstances, you will need to ensure you provide accurate and honest replies to the questions given as they do hold legal weight. If you do not, and this leads to some loss for the buyer, they may have the right to bring a claim of misrepresentation against you for loss and even damages.
Misrepresentation can be claimed where there is a false statement of fact made by one party to another which induces that party to enter into the contract. It does not need to be the main or sole reason for the inducement, but in the least have some effect on the buyer’s decision.
It is therefore critical for you to be aware of the potential consequences of your words used when replying to enquiries.
Generally, if you are unaware of the position of something relating to a property, it is better to stay silent.
Committing Misrepresentation
In the case of William Sindall Plc v Cambridgeshire [1993], the courts confirmed that the statement ‘not as far as the vendor is aware’ implied that the seller had taken steps to verify their given comment. As the seller had not done so, the buyer was able to successfully claim misrepresentation.
Therefore, unless you have made some level of enquiry before answering, it is better to stay silent as anything you do say may insinuate liability on your part if any issue is then later revealed.
Liability can even arise where a buyer could have discovered or was actually aware of the issue where they were told otherwise. In the case of Clinicare Ltd v Orchard homes Development Ltd [2004], the buyer of commercial property relied upon the landlord’s replies confirming there was no rot in the property even though their own surveyor had told them otherwise.
Regardless, of their actual knowledge, the courts held that the buyer was able to rely on the information given by the landlord which was then revealed to be false and problematic.
For the above reasons, it is vital that when replying to enquiries, to be honest, but also concise. Liability can arise even where you may feel you have given the most honest reply if you do not know the implication behind your words.
It is, therefore, better for you to answer any questions you are unsure about, particularly with commercial properties, with the assistance of your solicitor.
Attwells are leading experts for all types of property matters and will be able to assist you with any questions you may have and advise on your property transactions throughout.
