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Case dismissed on Caveat Emptor principle.How does CPR 2008 protects us?


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Last year I bought a property with a tenant that was entered into an auction. 5 Days prior to me exchanging contracts the vendor had a council letter with a council order to remedy hazard 1 and 2 deficiencies. All 15 of them including damp and re-wiring. He has withheld this from me and as a result 3 weeks after completion council contacted me as a new owner to carry out these repairs. Total cost up to now £8000.

 

I have made a claim against a vendor for the cost of repairs based on the CPR 2008 regulations Misleading Omissions paragraph 6b as I would have never entered into a contract should I be aware of this. The vendor painted over the damp walls and made the property look nice so there was no way of knowing the hidden problems just by seeing it.

My case was last month and the Judge stated that I had no legal standing with my claim and on the caveat emptor principle dismissed it. I was never allowed to present my case or ask the vendor any questions. The whole case was about 15 min long during which the Judge talked. The vendor was not asked even 1 question.

 

To take this matter to court cost me £800 already and I feel I have been treated badly and did not get proper hearing. So I wonder how do CPR’s 2008 regulations protect buyers from cheating vendors? Also I feel that Judge failed to deal with all the issues that were put to him as per section 68(2) a and d of the Arbitration Act 1996. In fact he did not deal with any.

I am considering an appeal any help/advice would be appreciated.

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Last year I bought a property with a tenant that was entered into an auction. 5 Days prior to me exchanging contracts the vendor had a council letter with a council order to remedy hazard 1 and 2 deficiencies. All 15 of them including damp and re-wiring. He has withheld this from me and as a result 3 weeks after completion council contacted me as a new owner to carry out these repairs. Total cost up to now £8000.

 

I have made a claim against a vendor for the cost of repairs based on the CPR 2008 regulations Misleading Omissions paragraph 6b as I would have never entered into a contract should I be aware of this. The vendor painted over the damp walls and made the property look nice so there was no way of knowing the hidden problems just by seeing it.

My case was last month and the Judge stated that I had no legal standing with my claim and on the caveat emptor principle dismissed it. I was never allowed to present my case or ask the vendor any questions. The whole case was about 15 min long during which the Judge talked. The vendor was not asked even 1 question.

 

To take this matter to court cost me £800 already and I feel I have been treated badly and did not get proper hearing. So I wonder how do CPR’s 2008 regulations protect buyers from cheating vendors? Also I feel that Judge failed to deal with all the issues that were put to him as per section 68(2) a and d of the Arbitration Act 1996. In fact he did not deal with any.

I am considering an appeal any help/advice would be appreciated.

 

 

If you bought it at auction without the standard conveyancing, then caveat emptor is likely to apply (did you make the vendor revealing such information an explicit condition of sake?)

 

If bought with the standard conveyancing, what enquiries did your conveyancer make (or suggest to you)?, was there a survey of the property?

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Yes it was bought without standard conveancing. However the vendor also broke the auctioneers rule that all authority corrspondence even if received after the contracts must be disclosed. I did not know that vendor had anything to reveal so how could I have ask this question. I assumed that all there was to disclose would be in his legal pack as required by the auctioneers. I did not do the survey on the property but it seems that council did as the property was in their improvement scheme 1 year prior to the sale. That is one more information he did not disclose. Yes, maybe I was not prudent enough but I feel that is not against the law. What he did according to Cpr 2008 is.

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Perhaps you should be looking under the following legislation rather than the above.( The Consumer Protection from Unfair Trading Regulations 2008)

 

http://www.lawsociety.org.uk/practice-areas/property-residential/

 

http://www.legislation.gov.uk/ukpga/1881/41/pdfs/ukpga_18810041_en.pdf

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Perhaps you should be looking under the following legislation rather than the above.( The Consumer Protection from Unfair Trading Regulations 2008)

 

http://www.lawsociety.org.uk/practice-areas/property-residential/

 

http://www.legislation.gov.uk/ukpga/1881/41/pdfs/ukpga_18810041_en.pdf

 

I did look at CPUT also at BPR 2008 they all say the same, you must disclose key information. The vendor by the way is a property company he claimed in his defence that I am like him as I bought a property with a tenant therefore I am in business that is why I looked at BPR 2008, only I am just a husewife with 1 property to let: and he has 500 properties and is ltd company. I don't get it either it is against the law to witheld key information or not ?:???:

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I did look at CPUT also at BPR 2008 they all say the same, you must disclose key information. The vendor by the way is a property company he claimed in his defence that I am like him as I bought a property with a tenant therefore I am in business that is why I looked at BPR 2008, only I am just a husewife with 1 property to let: and he has 500 properties and is ltd company. I don't get it either it is against the law to witheld key information or not ?:???:

 

Part of the conveyancing process is to ask for relevant information.

 

The reason this exists is the well established caveat emptor principle for property sale : the seller cannot withold key information if asked, but is under no duty to reveal information unless asked.

 

AS for buying at an auction, you may get a property at a much reduced value, but the downside is there is even less requirement on the seller. They musn't lie, but that is about all.

 

I fear you are on a hiding to nothing here.

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So how should I understand this property expert?

 

http://www.hamhigh.co.uk/property/when_selling_my_house_am_i_legally_obliged_to_disclose_any_information_that_may_affect_a_potential_buyer_s_decision_1_4170528

 

and this judge's decision

 

http://www.todaysconveyancer.co.uk/high-court-dismiss-misrepresentation-claim-regarding-spif-cms-15408

 

yes the judge dismiss the case as there was no certaintly that an event was likely to happen. My event e.i works to the house had to happen and vendor knew about it. How can law be so confusing ?

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As you were buying the property as a buy-to-let, I think you were buying the property for the purposes of a business, therefore you were not a consumer and you were not protected by the CPUT2008.

 

Generally, in law, there is no requirement to disclose any information. There are exceptions if your contract says you are required to disclose certain things (which is the case with normal conveyancing but maybe not with auctions), if you are dealing as a consumer (which you weren't) or if the seller chooses to make an incorrect statement known as a misrepresentation (the seller can be sued if he tells you something untrue).

 

The Arbitration Act does not apply either because this was not an arbitration, it was a court case.

 

However the vendor also broke the auctioneers rule that all authority corrspondence even if received after the contracts must be disclosed

Are you able to expand on this? If the auction house terms and conditions required disclosure of certain things, then you might be able to make a breach of contract claim. It would probably be a bit difficult to bring a new claim now though.

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So how should I understand this property expert?

 

http://www.hamhigh.co.uk/property/when_selling_my_house_am_i_legally_obliged_to_disclose_any_information_that_may_affect_a_potential_buyer_s_decision_1_4170528

 

and this judge's decision

 

http://www.todaysconveyancer.co.uk/high-court-dismiss-misrepresentation-claim-regarding-spif-cms-15408

 

yes the judge dismiss the case as there was no certaintly that an event was likely to happen. My event e.i works to the house had to happen and vendor knew about it. How can law be so confusing ?

 

It isn't confusing ; you are confused by it. There is a difference.

 

Firstly, this was a sale by auction.

Secondly you bought it in pursuit of business, so the CPUT doesn't apply.

Thirdly, if you bought it as a Consumer, not at auction, the Ham&High article notes:

"Before they market a property, a reputable agent should ask you to fill in a Property Information Questionnaire where you can put down any relevant information".

 

If there was a misrepresentation in the PIQ, or the auction listing, or in a question you asked : you'd have a case.

 

But you chose to buy, as a business, at an auction, without a survey.

Unless you asked, or the auction listing had a misrepresentation : you are at risk.

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As you were buying the property as a buy-to-let, I think you were buying the property for the purposes of a business, therefore you were not a consumer and you were not protected by the CPUT2008.

 

Generally, in law, there is no requirement to disclose any information. There are exceptions if your contract says you are required to disclose certain things (which is the case with normal conveyancing but maybe not with auctions), if you are dealing as a consumer (which you weren't) or if the seller chooses to make an incorrect statement known as a misrepresentation (the seller can be sued if he tells you something untrue).

 

The Arbitration Act does not apply either because this was not an arbitration, it was a court case.

 

 

Are you able to expand on this? If the auction house terms and conditions required disclosure of certain things, then you might be able to make a breach of contract claim. It would probably be a bit difficult to bring a new claim now though.

 

Yes auction conditions clause G1.6 requires to disclose any authority letter received even after contract. This was also part of my claim. The vendor admitted to it saying this was not disclosed in error. Yet again the Judge never addressed this issue.

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Yes auction conditions clause G1.6 requires to disclose any authority letter received even after contract. This was also part of my claim. The vendor admitted to it saying this was not disclosed in error. Yet again the Judge never addressed this issue.

I see. If the relevant clause applies to your case and was not considered by the judge, you may be able to appeal (there are very strict time limits for appealing).

 

Are you able to tell us what clause G1.6 actually says? Does it apply to correspondence received before the date of the contract, or only correspondence received after the date of the contract?

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I see. If the relevant clause applies to your case and was not considered by the judge, you may be able to appeal (there are very strict time limits for appealing).

 

Are you able to tell us what clause G1.6 actually says? Does it apply to correspondence received before the date of the contract, or only correspondence received after the date of the contract?

 

G1.6 " The SELLER must notify the BUYER of any notices,orders,demands,proposals and requirements of any competent authority of which it learns after the CONTRACT DATE but the BUYER must comply with them and keep the SELLER indemnified."

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G1.6 " The SELLER must notify the BUYER of any notices,orders,demands,proposals and requirements of any competent authority of which it learns after the CONTRACT DATE but the BUYER must comply with them and keep the SELLER indemnified."

 

That says they have to notify you of them, but:

a) you must comply with the notices, and

b) IF the Seller pays for them or is made to pay for them, you have to re-imburse the Seller (keep the Seller "indemnified").

 

That doesn't mean you can force the Seller to pay for them and then you not reimburse the Seller, nor does it mean if you pay that the Seller must refund you : it means quite the opposite!.

 

It also doesn't mean you can withdraw from the contract, either .....

 

 

Additionally, you seem unclear as to if the seller knew before or after the contracts were exchanged.

You are referring to a clause 'relevant to events after the contract date', but your initial post notes

" Days prior to me exchanging contracts the vendor had a council letter with a council order to remedy hazard 1 and 2 deficiencies"

 

did they know before, or only after?

 

I'm not sure it will make much difference :

if before : caveat emptor applies

if after : you couldn't withdraw from the contract and would end up paying anyway ....

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That says they have to notify you of them, but:

a) you must comply with the notices, and

b) IF the Seller pays for them or is made to pay for them, you have to re-imburse the Seller (keep the Seller "indemnified").

 

That doesn't mean you can force the Seller to pay for them and then you not reimburse the Seller, nor does it mean if you pay that the Seller must refund you : it means quite the opposite!.

 

It also doesn't mean you can withdraw from the contract, either .....

 

 

Additionally, you seem unclear as to if the seller knew before or after the contracts were exchanged.

You are referring to a clause 'relevant to events after the contract date', but your initial post notes

" Days prior to me exchanging contracts the vendor had a council letter with a council order to remedy hazard 1 and 2 deficiencies"

 

did they know before, or only after?

 

I'm not sure it will make much difference :

if before : caveat emptor applies

if after : you couldn't withdraw from the contract and would end up paying anyway ....

 

Yes I do understand your point about G1.6 however the fact remains he has failed to do so. Also auctioneers do expect the seller to disclose what they should reasonably know about. G1.4 says "The LOT is sold subject to such of the following as may affect it whether before or after CONTRACT DATE and whether or not they are disclosed by the seller or apparent from inspection (i) anything the seller does not and could not reasonably know about" So that means if he failed to disclose something he was not aware of I could not make a claim. What if he was totally aware of it?

 

I have a confirmation from the council that they have e-mailed them the letter with schedule of repairs on 16/7 ,I have exchanged contracts on 21/7. Seems to me the vendor did everything to secure the sale and avoid expensive repairs by withholding this information and there is no law against that.

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G1.6 " The SELLER must notify the BUYER of any notices,orders,demands,proposals and requirements of any competent authority of which it learns after the CONTRACT DATE but the BUYER must comply with them and keep the SELLER indemnified."

 

As I read that, it only applies to notices received after the date of the contract. It doesn't seem to cover the state of the property at the date of the auction.

 

Looking at what appears to be the same set of T&Cs online, G1.4 says:

 

G1.4 The lot is also sold subject to such of the following as may affect it, whether they arise before or after the contract date and whether or not they are disclosed by the seller or are apparent from

inspection of the lot or from the documents:

...

© notices, orders, demands, proposals and requirements of any competent authority;

 

That seems to contemplate that the seller may not disclose such notices and that you take the risk of this by participating in the auction.

 

It sounds like you have got badly burnt, that is really unfortunate and I feel for you, but unfortunately I'm not seeing a route to legal recourse based on those T&Cs.

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. G1.4 says "The LOT is sold subject to such of the following as may affect it whether before or after CONTRACT DATE and whether or not they are disclosed by the seller or apparent from inspection (i) anything the seller does not and could not reasonably know about" So that means if he failed to disclose something he was not aware of I could not make a claim. What if he was totally aware of it?

 

G1.4 would be a nonsense if it said "Seller doesn't have to disclose anything they don't know about" : as that follows naturally.

 

G1.4 is actually saying "sold as seen, without any warranty".

 

Buying at auction you can expect to have the chance to buy very cheaply. The downside is you take on the risk eg repairs may be needed.

Selling at auction the seller may get far less, but

A) may get a quicker sale, and

B) doesn't have to give warranties about the state of the property.

They can't lie if asked (that would be a misrepresentation) but don't have to volunteer information.

 

Why do you think the seller chose to use an auction?.

Caveat emptor.

 

Unless you can come up with some new compelling reason to give you a cause of action against the seller : think carefully before wasting any further money on legal costs.

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Thank you all for your help. It is very much appreciated.

Seems I have to put it down to a bad experience but it is difficult to understand that with all these new laws to protect buyers there is nothing you can do if seller chooses to play dirty.

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Sorry just one more question. This was also part of my case.

 

In auction details it was said that the property was producing £9256 pa. This seemed double the rate for a small 2 bed terrace house in that area. However in their legal pack the short hold tenancy agreement confirmed that amount.

I have telephoned the managing agent in this regard and was informed that they credit the tenant back £79 pw therefore the actual income is £5148 pa. That was later amended in auction addendum to that amount.

However my tenant tells me that she was never asked any extra rent above what the previous owner was receiving through her benefits office (£4628 pa) and indeed signed the confirmation of this.

 

Can the vendor state that the property is producing £5148 pa if do not have a signed agreement to confirm that income?

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Sorry just one more question. This was also part of my case.

 

In auction details it was said that the property was producing £9256 pa. This seemed double the rate for a small 2 bed terrace house in that area. However in their legal pack the short hold tenancy agreement confirmed that amount.

I have telephoned the managing agent in this regard and was informed that they credit the tenant back £79 pw therefore the actual income is £5148 pa. That was later amended in auction addendum to that amount.

However my tenant tells me that she was never asked any extra rent above what the previous owner was receiving through her benefits office (£4628 pa) and indeed signed the confirmation of this.

 

Can the vendor state that the property is producing £5148 pa if do not have a signed agreement to confirm that income?

 

 

I think you would have been far better advised to pursue this as a misrepresentation when you presented your case.

Was this heard at all given your case has already been heard?

If it was part of your case stated : appeal. If not, you will struggle to only now introduce this.

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If the vendor stated in their pack that the property was producing £5,148 pa, and the property is not producing £5,148 pa, then you may be able to sue them for that. As Bazza says the difficulty is whether you included that in your previous particulars of claim submitted to the court (as you are generally only allowed to sue people once over the same thing)?

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I think you would have been far better advised to pursue this as a misrepresentation when you presented your case.

Was this heard at all given your case has already been heard?

If it was part of your case stated : appeal. If not, you will struggle to only now introduce this.

 

I did pursue this as a misrepresentation but the judge never allowed me to present my case and never addressed any issues in my case inc the rent. that is the problem I feel I had no hearing for which I paid for as it was dismissed in the matter of 10-15 min. Not even sure the judge read my claim.

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If the vendor stated in their pack that the property was producing £5,148 pa, and the property is not producing £5,148 pa, then you may be able to sue them for that. As Bazza says the difficulty is whether you included that in your previous particulars of claim submitted to the court (as you are generally only allowed to sue people once over the same thing)?

 

Yes it was part of my claim.

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The only agreement with the tenant he had was for double that amount . So do I take it if he did not have clear signed agreement for £5148 pa that would be misrepresentation?

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