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Our clients had purchased a residential property. They were advised that the sellers had not had any neighbour disputes. This proved to be incorrect. Our clients’ property had decreased in value by 30% (some £150,000) due to the problems with the neighbour as verified by expert valuation evidence. Had our clients been informed that there were neighbour disputes previously, they would not have purchased the Property because they would not have risked incurring the future losses which may be sustained when they come to sell if the neighbour issues persist.
We advised on whether our clients could legally assign blame for their situation on their solicitors or the seller’s solicitors and could and should they consider a legal action against the sellers?
Having assessed all the options, we advised our clients that the legal and financial risks outweighed the potential benefits of suing.
As part of a conveyancing transaction, 2 of the key documents provided by the seller’s solicitors are :-
The contract which generally incorporate standard terms as drafted by the Law Society (Standard Conditions of Sale)
TA6 form otherwise known as the Sellers’ Property Information Form (SPIF’) which is a standard set of questions with answers from the seller.
The clients were provided with the SPIF which confirmed that no complaints had every been made to or about any neighbour, that no complaints had every been received and that no disputes had arisen relating to the property or any adjoining property. The answers to these questions were reaffirmed by the seller in replies to specific follow up.
After completion, our clients moved into the property and problems started. They had continuous disagreements with their neighbour, which later resulted in a conviction for assault against the neighbour. Our clients discovered that there had been extensive issues with the same neighbour both over parking and a proposed extension, which led to both a boundary and planning dispute. In addition other neighbours in the same street had moved out of their rented accommodation because of the aggressive and threatening behaviour of the one neighbour in question.
It also transpired that the seller had tried to sell the property previously but had been unable to do so due to the disputes with the neighbour.
We considered this claim in detail for the clients and looked at possible legal claims for :
1. Professional negligence – this claim did not have good prospects against the seller’s solicitors because there is generally no duty of care owed to non client third parties by solicitors. Second, the solicitors were acting on their clients instructions and answers in the SPIF. There was no evidence that the solicitors were aware of the neighbour disputes and this claim would likely fail. Our clients own solicitors were highly unlikely to have been negligent as they had raised enquiries about any neighbour disputes.
2. Contract claim against the Sellers – the clients needed to prove that the seller had breached the terms of the sale contract. The contract used in the conveyancing transaction did not incorporate the ability to rely on the information contained in the SPIF (which our clients alleged were untrue). This meant that the claim for breach of contract would likely fail.
3. Tort of deceit - a type of common law claim (law based on previous cases and judges’ decisions). To succeed in a claim for the tort of deceit you must provide the following:
a. the defendant makes a false representation to the claimant
b. the defendant knows that the representation is false, alternatively, he is reckless as to whether it is true or false
c. the defendant intends that the claimant should act in reliance on it
d. the claimant does act in reliance on the representation and, in consequence, suffers loss
The success of a claim in deceit will be evidence as to the false representation – see below for the outcome of this point.
4. Misrepresentation Claim Against the Sellers – a very similar type of claim as for deceit but based on statutory grounds and based specifically on inducing a party to enter into a contract.
The contract included a non-reliance statement meaning that the clients had signed to say that they had not placed reliance on any statement made outside of the contract itself.
The contract did not list the SPIF as a key document and arguably at first face, the clients had a weak claim here. It is worth noting that most contracts for sale of residential property do not include a non-reliance clause or if they do, solicitors try to remove them before the contract is signed. In this case it remained in the contract.
As against this, our client could potentially argue that the clause was unfair in accordance with the Unfair Contract Terms Act 1977.
Based on case law, our view was that there was a chance that the non-reliance clause in the contract might be deemed unreasonable.
The second legal and evidential hurdle for a contractual claim against the seller was proving the alleged misrepresentation by the seller was made knowingly. We would need evidence from former and current neighbours to support that claim. Unfortunately, no one was prepared to give evidence in court on the matter.
Consequently, the legal risks of not succeeding with claims were high.
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Partner - Deputy Head Civil Litigation/Professional Negligence
Louise has been practising law and specifically litigation for over 16 years. She deals with Professional Negligence, Insurance litigation, Commercial disputes as well as product liability and building disputes. During her career, she has gained huge i...
