Property vendors are nowadays routinely required to fill in lengthy information forms, giving answers to a multitude of questions that may be important to a purchaser. That task may seem mundane but, as a High Court ruling showed, it is vital to perform it with the utmost care and accuracy.
A woman bought a leasehold flat from a property development company which had recently refurbished it. Prior to the sale, the company's sole director signed a Law Society information form which confirmed that the vendor was unaware of any unresolved planning issues in respect of the property. The form also confirmed that the vendor was unaware of any breaches of planning conditions or of any works carried out that did not have all the necessary consents.
The woman was subsequently informed by the local authority that a skylight window had been installed in one of the flat's two bedrooms without planning consent. Such permission was required because the property was in a conservation area. In order to avoid enforcement action, she removed the window.
The room was thereby deprived of natural light and ventilation so that it could not lawfully be used as a bedroom. Extensive reconfiguration works were required to maintain the flat as a two-bedroom property. The woman launched proceedings against the company, seeking damages for misrepresentation.
The director confirmed that, when filling in the information form, he had not referred to planning permission documents but had relied on his memory as to what was in them and what work had been carried out. He had no understanding at the time that the window, which had been installed during the refurbishment, required planning permission. He had not been personally involved in installing the window and there was nothing to put him on notice that planning consent was required.
Upholding the woman's claim, however, the Court noted that the room was referred to as a bedroom in an estate agent's email and on plans with which she was provided before the sale. That would have reasonably led a purchaser in her position to believe that the room was at least capable of being lawfully used as a bedroom.
Whilst not questioning the director's integrity, skill or expertise as a developer, the Court found that, when he signed the information form, he did not have reasonable grounds for believing that no work had been carried out that lacked a required consent. The case, the Court noted, underlined the need to make appropriate enquiries before filling in a property information form.
The Court was satisfied that, had it not been for the misrepresentations, the woman would not have proceeded with the purchase. The company was ordered to pay her £30,000 in damages, reflecting the difference between the price she had paid for the flat and its true value at the time. Her total award, including various costs and expenses arising from the misrepresentations, came to £34,142.