Bought a House with Problems Not Disclosed?
Here’s What to Do…

When you buy a house, the seller must fill in a Property Information form – or TA6. This needs to disclose any important problems or associated issues (amongst other details).

It is the seller’s legal responsibility to disclose all known information about the house that may affect the buyer’s decision to make the purchase, whether positive or negative.

So, if you discover an issue with your new house once the conveyancing is complete, and if it seems likely that the seller was aware of the matter prior to the sale, you may be able to take legal action against the previous owner.

You may even be able to request the rescission (or cancellation) of the contract to which you had initially agreed.

In this article, Property Solvers Home Buyers will explore a range of problems that may arise when buying a house that you only become aware of after completion.

We then run through how you can take action if you feel that the seller, their estate agent or their solicitor has provided misleading information or failed to disclose a major fault.

What Kind of Problems Should a Seller Disclose on a Property Information Form (TA6)?

When filling in the TA6 Law Society form, it is the seller’s responsibility to disclose:

• Structural defects such as undisclosed problems with the roof or subsidence
• Natural hazards such as flooding history
• Changes in boundary lines
• The existence of certain easements associated with the house or land
• Legal problems such as ongoing disputes or covenants
• Rejected planning permission applications
• Information about proposed new builds or developments nearby to which they may be party to
• Details of known issues with Japanese Knotweed or other invasive species or infestations
• The presence of rot or damp
• Material defects, such as issues with particular fixtures and fittings
• The existence of tenants or any significant matters relating to the home’s current occupiers
• Ongoing significant neighbourhood disputes – particularly those that have involved lawyers or the police.

The above is not an exhaustive list. You may be able to take action if there is any other major undisclosed problem with the property. The same goes for any other vital but unmentioned information that you have reason to believe was within the seller’s knowledge.

It may be possible to claim misrepresentation of property if you believe that the seller failed to disclose information about a house’s condition.

You will almost certainly have a claim if that information would be likely to influence potential buyers regarding the purchase. This is also the case if the undisclosed issues represent a major hazard or cause any unexpected expense.

What Constitutes a Suitably “Significant” Issue in a Property?

A problem such as a dripping shower head causing a water stain should not require disclosure by the seller.

This is because the new owner can resolve it fairly easily and cheaply. What’s more, it does not represent a danger to the buyer or any member of their household. Also, it would not usually prompt a buyer to demand a lower price for the house. Nor would it influence them to withdraw from the sale.

However, your new house may contain more significant defects undisclosed by the seller or their estate agent. If so, you may be able to claim damages or make particular demands.

What Action Can I Take if Bought a House with Undisclosed Problems?

There are numerous options open to the buyer upon discovering problems that were not stated in the legal documentation related to their new property.

As a buyer, your specific course of action will usually depend upon the current stage of the conveyancing process.

What if the Conveyancing Process Has Not Yet Completed?

If you have noticed undisclosed problems with a house prior to exchange of contracts or the completion of the sale, you have a number of options open to you.

You may demand that the seller pays to rectify the problem – thus avoiding any financial loss on your own part. Alternatively, you may request a reduction in the asking price. This is another way to avoid unnecessary expense. You would normally need to do this via the estate agent.

If the seller refuses these options, the buyer should then decide whether or not to continue with the purchase.

Often, the threat of losing a sale will be enough to push the current owner into action and to either drop the price or pay for the necessary remedial work. Again, the estate agent can help manage this in order to satisfy both the seller and buyer.

What if I Have Already Bought a House with Problems Not Disclosed?

If you’ve already bought a house, and if you only noticed any major defects after the completion of the sale, things may be a little more complex.

However, you may be able to prove that your decision regarding the transaction was influenced by the omission of certain significant information. If so, you could be able to claim damages. The same is the case if you have incurred significant expenses in order to rectify problems that were not mentioned in the TA6.

“Buyer Beware”

There is, of course, the matter of caveat emptor (or “let the buyer beware”).

This is a legal principle stipulating that the buyer must have properly examined the property before entering the transaction.

This means that, if the seller did not take proper precautions during conveyancing, they may not be held responsible for undisclosed problems with the property. The fault, therefore, lies with the buyer (who will not usually have much of a chance from a legal standpoint).

For this reason, you should never skip undertaking a professional property survey.

A RICS-approved surveyor/valuer will thoroughly examine the house before you continue as a buyer. The mortgage company may contract this survey, but this will usually be the most basic version. It will be more an assessment of value than a thorough inspection,

Never rely on an informal survey (or home inspection report) undertaken by the estate agent managing the sale. Their main interest is to sell the house.

As long as you have taken the correct steps, you will still be able to seek compensation if you find that the property has been misrepresented to you.

You must have proof that the seller was aware of the undisclosed problem prior to the sale, or even that the seller lied actively about the condition of the property. If you do, you may well be successful in your compensation claim.

Can You Hold the Estate Agent Responsible for Undisclosed Problems?

You may also be able to seek compensation from the estate agency that managed the sale.

The Consumer Protection from Unfair Trading Regulations 2008 prohibits “misleading” actions or omissions that cause the buyer to go ahead with the transaction that they would not go ahead with otherwise.

Estate agents have a responsibility to provide accurate information on the size of the property, Energy Performance Certificate (EPC) ratings, council tax banding as well as broader details on extension works, parking and location. The photos must also reflect the current condition of the property.

Should you feel you have been genuinely misled, it’s worth taking a screenshot of the listing and forwarding any marketing material/communication to your solicitor.

How Can Buyers Claim Compensation Against a Seller?

If you believe that the seller misrepresented the condition of their property, either actively or via any omission, the best first step is to instruct a solicitor that specialises in property law.

Be sure to give them as much information as you can about both the seller’s and your own actions throughout the process. You should include evidence such as all paperwork you received from the seller, their estate agent and their conveyancer.

Your solicitor will help to identify any and all instances of non-disclosure throughout the run-up to the exchange of contracts and the sale of the property. They will therefore be well-placed to fight your case in court.

If they are able to prove that the seller or any of their representatives failed to provide legally required information, you may well win your case.

You can expect similar success if they can prove that the seller had knowledge of problems with the property that they purposefully did not disclose.

What Outcomes are Likely if I Decide to Seek Compensation?

When the buyer of a property takes the seller to court for misrepresentation, there are a number of possible outcomes.

Outcome 1: The Claim Fails

Firstly, the court may “throw the case out” if it is found that there was no misrepresentation, or that the misrepresentation caused no detriment to the buyer.

A claim may also fail if the buyer’s decision to purchase their new house was not influenced by the misrepresentation.

The court may also call upon the principle of caveat emptor, mentioned above. It might be decided that the buyer did not take enough care when arranging surveys, inspections or checks of the house, for instance.

Alternatively, it may be found that the matter was not the fault of the seller nor the buyer – but that the responsible party was the property solicitor acting on the seller’s behalf.

Should the latter be the outcome, the buyer may choose to pursue a professional negligence claim against the solicitor.

Outcome 2: “Innocent Misrepresentation” of the Property

This may be the finding if the buyer is not able to clearly prove that the seller purposefully misrepresented their property. It may also be found if the seller can successfully argue that they were not aware of a problem with the property.

It may be that the court decides that the seller was truly unaware of any faults, or it may be that the omission of the required information was accidental.

The buyer will usually still be able to claim damages in situations of “innocent misrepresentation”, as they will still have been negatively affected by the seller’s mistake.

Outcome 3: “Negligent Misrepresentation” of the Property

The court may decide that the seller did not complete their side of the transaction with due care and attention.

This resulted in their buyers taking action that they would not have taken with the full information to hand. This action is usually the purchase of the property or the spending of a certain significant amount.

Outcome 4: “Reckless Misrepresentation” of the Property

In a similar vein to the above, “reckless” misrepresentation is another possible ruling.

In cases of this kind, you will need to prove that the seller has failed to undertake the necessary checks to ensure that all information was accurate before it was provided.

Outcome 5: “Fraudulent Misrepresentation” of the Property

A finding of “fraudulent misrepresentation” requires proof that the seller purposefully lied about the condition of the house.

Alternatively, they may have actively omitted vital information to achieve a sale or a higher price.

Possible Court Rulings

Once the court has decided whether or not any misrepresentation took place, and if so, whether it was “innocent”, “negligent”, “reckless” or “fraudulent”, the final ruling is down to their discretion.

Mitigating and aggravating factors will be taken into account. These usually include the perceived severity of the misrepresentation on the part of the seller and the scale of the detrimental effects suffered by the buyer.

The resulting penalties and actions will then be decided.

Damages

Commonly, if found to have “innocently”, “negligently”, “recklessly” or “fraudulently” misrepresented their property to the buyer, the seller will be required to pay damages.

The amount is often calculated using the expenses that the buyer has already incurred, or the estimated cost of remedying the faults in the house.

Rescission

In more extreme cases, where the court decides that any financial damages paid would not suffice to compensate the seller, it may be ruled that the property contract will be rescinded.

This means that the sale of the house is nullified. The property will then return to the ownership of the seller.

The buyer will be able to reclaim the amount they spent to buy the property, along with any further damages awarded by the court.

How to Protect Yourself Against Claims of Misrepresentation as a Seller

As a seller, in order to avoid any chance of the misrepresentation of property, you should take all of the following steps.

Be Selective with Your Property Sale Specialists and Legal Representatives

It can be fairly easy to omit key information if the service providers you are using have failed to transparently explain everything to you. This is a particular risk if it is your first time as a seller.

Take time to read reviews of estate agents and conveyancers on sites such as Trustpilot, Google Reviews and Reviews.co.uk.

Remember to ask others for recommendations. This will help you to choose experienced and diligent specialists to guide you through the process with care.

Go Through all Paperwork Carefully with Your Estate Agent and Conveyancer

Never rush a TA6 form – or, indeed, any paperwork that your estate agent or solicitor puts in front of you.

Arrange a Professional Survey and Local Searches

The “survey” – sometimes called a home inspection report – that the estate agents undertook when you first bought the property will not be sufficient when the time comes to sell it years later.

Although not always necessary, you may want to engage RICS-qualified surveyor to produce a professional report. This will “flag up” any problems with your property’s structure and point to other issues of concern.

Your solicitor should also undertake checks and Land Registry searches of the local area. They will then inform you of anything that you will need to add to your TA6.

You should add to this form everything of importance that arises – to avoid any trouble later on. If you fail to disclose problems, you may find yourself legally culpable.

Stay on Top of Repairs and Maintenance

It is much easier and cheaper for sellers to resolve structural issues and other maintenance concerns – including problems with invasive species like Japanese Knotweed – as and when they arise. It is far more difficult to tackle them right before selling.

By remaining diligent as to the condition of their house, sellers may be able to prevent the occurrence of most problems that would need to be mentioned on a TA6 form. They may also enjoy the additional benefit of selling at a better price further down the line!

In Conclusion

This article was created to provide useful guidance. If as a buyer, you feel that the sellers of a house you have purchased have failed to disclose vital information, we hope you now better understand the action you may take.

We also hope that we have provided handy advice for homeowners concerned about the disclosures they should make when selling.

With proper care and attention from all parties involved, you can easily avoid legal issues.