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The Property Information Form and misrepresentation

Whether you are a seasoned property investor or you are selling your property for the first time, one of the most important documents you will have to fill in during the process is the Property Information Form.

As the name suggests, this form contains information about the property’s ownership, boundaries, disputes, compliance with building regulations and other factors affecting the property.  The Form forms part of the contract and is binding on the seller, therefore all the information provided has to be to the seller’s best knowledge.

In many cases however, sellers do not fully understand the underlying legal obligations behind filling in the form.  One of the most common reasons for disputes after the legal sale of a property relates to misrepresentation in relation to the seller’s comments on the Form. If the buyer relies on a statement on the Form about the state of the property and after completion it transpires that the statement was false or incorrect, the buyer will then potentially have a claim for misrepresentation against the seller.  This is the case even if the statement on the Form was made negligently because the seller did not carry out fully the necessary checks in order to answer the questions correctly or innocently, where the seller unintentionally mislead the buyer.  Unfortunately, this can then become a very expensive mistake on the seller’s part and depending on the resulting loss to the buyer in relying on the Property Information Form, the seller can find themselves owing thousand of pounds to the buyer.

When answering the questions on the Form, it is important to always provide an honest answer, even if it means writing “The seller does not know, the buyer should rely on their own investigation”. By way of an example, let’s take the question “Is the property affected by Japanese Knotweed?”.   Let’s also suppose that the seller has answered “No” to that question without carrying out any checks on the property. The seller may not know what Japanese Knotweed is/looks like and just assumes that because he has never seen any or encountered any problems, then it is likely that there is no Japanese Knotweed present on the property. Unfortunately, if Japanese Knotweed is then found present on the property, the seller will become liable for misrepresentation and the buyer will have a valid claim against them.  The seller should have answered instead “The seller does not know, the buyer should rely on their own investigation”.

Japanese Knotweed is an invasive plant which is extremely hard to eradicate.  The cost of eradication of this plant alone can cost between £2,000 and £5,000, depending on it’s proximity to a property and the size of infestation, to in excess of £20,000.

Therefore it is always advisable that a seller should conduct full investigation of the property before they answer the questions on the Form.  If the seller is ever unsure about an answer to a question, in order to safeguard themselves, they should advise the buyer to conduct their own survey and find out the answer for themselves. 

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