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There are many factors to consider for prospective property buyers. Proposed   developments nearby a property are definitely among them.

We recently acted for a client in Wales where we discovered that half of next door’s garden had just been sold to a developer. Shortly before exchange of contracts this was registered at the Land Registry. The Seller had not mentioned this in any forms they competed and technically they were correct to do so – a planning application to develop this land had been submitted to the Local Council but no notices had yet been sent out to the neighbouring properties.

The two recent cases illustrate the importance of information about development and their disclosure to the clients.

In the case of Thorp v Abbotts [2015] the High Court was asked whether the replies in the Seller’s Property Information Form (SPIF) had been misrepresentations. The Sellers, by answering questions in the SPIF, confirmed that they had not received any communication neither had any discussions with the neighbour affecting the property. In fact, the Sellers not only were aware of the planned development, having attended public meetings regarding the development, but also had discussions about the proposals with nearby residents.

The Thorps became aware of proposals for large scale developments in the area after completion, when an application for planning permission was submitted for over 800 houses nearby. The Thorps stated that they would have withdrawn from the purchase if they were aware of this.

The important conclusion from this case is that the first rule of a conveyancing transaction is still “caveat emptor”, which is literally translated to 'let the buyer beware'. It means that the seller is under no duty to disclose speculative and remote information and the buyer must satisfy himself about the state and condition of a property and as to any other matters he might consider relevant to his purchase.  

The purchasers need to bear in mind that relying on information provided by the Seller is not always sufficient. Questions included in the SPIF are intended to be answered by lay persons and cannot come under detailed expert scrutiny.

This is a reason why solicitors representing purchasers conduct normal searches and enquiries of local authorities, and such other investigations that are deemed necessary. Normal searches however may not reveal a potential development near the property.

In another case, namely Orientfield Holdings Ltd v Bird & Bird LLP [2015], there was a similar situation as the information about proposed development of a site near the property had not been disclosed by the sellers. Within the SPIF there was a question related to notices or letters received which would affect the property the seller marked ‘no’. Furthermore, in response to a question as to whether the sellers were aware of any proposals for development nearby, they had written that the buyers should make their own enquiries.

When shortly before completion, the purchaser found out that it was proposed to develop a local school site near the property, they complained to the Sellers on the basis that the answer to question 3.1 in the SPIF was untrue because (i) the Seller had received notice of application for planning permissions (ii) the Seller submitted a detailed objection at outline application stage and (iii) had objected at detailed planning stage.

It was decided in this case the Seller had not done anything wrong as the proposed development was a school but the response on the form stating that “the buyer should rely on their own investigations” was reasonable.

At McHale & Company Solicitors keep our clients fully informed of all matters relevant to their transactions. We take detailed instructions to make sure that the specific enquires are raised and our Clients concerns are responded so they can always make informative decision on how to proceed.

There are additional Planning and Development Searches that can be carried out if you think there is a possibility of development near a property you are buying.

Should you require conveyancing advice and assistance, please feel free to call McHale & Co Solicitors on 0161 928 3848 or email mch@mchaleandco.co.uk.

Categories: Conveyancing

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