When you are buying a property it is commonly accepted that as the buyer you should undertake sufficient investigation of what you are buying. It is important to consider the state of the property, the boundaries, access to and from the property and any third party rights over the property. Most of these issues can be investigated through the usual searches and a good look around the property. A buyer also has the comfort of the Sellers Property Information Form (‘SPIF’), which raises standard enquiries of the seller concerning various issues such as responsibility for the boundaries and any known disputes.
But what obligation does the seller have to the buyer? The principle of buyer beware seems to be oddly one sided. The SPIF is an important document for the seller and one that should not be completed lightly. The information in the SPIF needs to be as full as possible if it is not the seller may find themselves faced with a claim for misrepresentation. If such a claim is made and can be substantiated the seller risks a claim for damages (among other remedies) which, depending on the facts, could be significant. Never let someone else complete this form for you without thoroughly checking the answers provided on your behalf.
Recent case law has considered the seller’s position and has decided that when completing the SPIF a seller has to consider whether a particular event was likely to happen and if so would it affect the property. If the answer is yes then it is likely to be something that should be included in the SPIF. The court also indicated that the effect on the value of the property was not in itself enough to require disclosure if the other considerations were not met.
There has been some degree of confusion in relation to the consumer regulations which have been brought into force to protect consumer from unscrupulous sales practices. The regulations appeared at first to reinforce the role of the SPIF by requiring disclosure of any information that may affect a buyer’s decision failing which there may be criminal sanctions including a fine. However, recent clarification has confirmed that these regulations do not apply to house sales but even so care should be taken when completing the form.