McHale & Co. Solicitors Blog

Seller’s Replies to Enquiries Found to be Fraudulent

A seller will provide replies to enquiries when selling a residential or commercial property. Answering these enquiries may be viewed as being a laborious task by some sellers, especially when they want the transaction to complete in a short space of time. However, what happens when these replies are misleading and found to be fraudulent or reckless?

Inaccurate replies from one seller cost them £395,948 after damages for deceit and return of deposit were awarded to the buyer. This came from a recent High Court decision of 'Greenridge One Luton one Ltd and another v Kempton Investments Ltd' [2016]. This is a strong reminder to all sellers it is well worth their time to ensure replies given to the buyers are accurate. 

The replies from the seller stated that, although there had been historic issues raised by a tenant, no complaints or disputes were made. No mention was made of the tenant’s withholding service charge, despite the buyer’s solicitor trying to obtain further information. At the time when contracts were exchanged the seller’s solicitors were not forthcoming over the service charge dispute.

The service charge dispute came to light prior to completion and the bank’s valuers advised the dispute should be resolved before the purchase could complete. The buyer rescinded the contract claiming return of the deposit and damages from fraudulent misrepresentation of the seller. The matter went to court and the judge agreed that the seller had either fraudulently misrepresented the situation, or had been reckless as to whether the information provided was correct. It held the buyer was entitled to terminate the contract, claim the return of the deposit, and receive damages for the tort of deceit by the seller. 

It is vital to note from this case the buyer withdrew shortly before completion. This emphasises the importance of checking that replies given are accurate at the time of exchange as well as completion. If any circumstances change during the transaction, or further information comes to light, even during the period between exchange and completion, the replies must be updated so that all the information is correct up to the point of completion.

McHale & Co have a highly trained team of experienced solicitors and conveyancers in all aspects of Property Law. If you are purchasing a property and feel the seller may have been dishonest or not disclosed anything, please contact our property team on 0161 928 3848 or at mch@mchaleandco.co.uk

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