Exchanged contracts, discovered seller not been tranparent
Discussion
Late August we signed contracts on house. Solicitor undertook usual searches which revealed nothing much apart from the fact over a year ago planning permission had been sought and REJECTED for a 1 acre Waste Disposal site 120m from the street. This appeared in the fine detail of the searches but solicitor didn't mention or discuss this with us. Nothing on the seller declaration form referenced the proposed site. For this reason, and since the planning application had been rejected by the council, we didn't think too much of it and went ahead.Oops!
We've since been away for 4 weeks, and completion date is now 2 weeks away.
Yesterday we found out completely by chance that an appeal to the Secretary of State had been lodged by the company in late July. They REALLY want to build the waste transfer site in this location, it appears.
Delving further into the details, we've now found:
a) there is huge local opposition to the site - over 600 people are involved in activist meetings, groups. £10,000 has been raised to fight the appeal. A barrister has been engaged.
b) the appeal was lodged in late July, 4 weeks before we signed contracts
c) the seller knew about the appeal - he attended meetings, wrote a detailed letter outlining his opposition (1 of 350 residents letters) and was involved in set up of the fighting fund
So now we have a problem: the seller didn't disclose this information. Neither did the estate agent, who have multiple properties for sale in the area. The solicitor completed searches before the appeal was lodged so had no knowledge either...but they didn't inform us an appeal was possible. Yes, we should have scrutinised the search paperwork more. But we naively assumed important items would be explained to us.
We feel duped by the seller, who clearly was privy to the information that an appeal to the site had been lodged 4 weeks before we exchanged. If successful, the residents' legal team have estimated a £500k to £1m affect on the valuation to the 13 house street (avg price £400k). After all, few people want to live close to a waste facility. If we do nothing and go ahead in two weeks as planned, 15% COULD be knocked off the house value within 2 months. We'll essentially have burnt our deposit within weeks that took years to save.
We'd have to endure a years worth of building work close by too - to construct a 12m high, 1 acre site. Then a 24hr waste operation thereafter.
The company is confident in their appeal - regardless of the facts in this particular case, around 40% of commercial planning appeals go through. It seems like to do nothing is a pretty big gamble.
We want to either:
1) rescind the contract on the ground that the seller and/or estate agent deliberately withheld this information. Our solicitor says that will be difficult to prove (despite the mountain of evidence we've managed to gather over the last 48hrs that all residents were actively involved, and were informed of the appeal by the company directly).
2) Get the seller to agree to put 15% of the purchase price into Escrow pending the planning appeal decision. If it's rejected for good, they can keep their 15%. If it goes through, we're compensated. We thought this would be a fair option to protect our potential downside.
Lawyers of PH... what should we do? TIA
We've since been away for 4 weeks, and completion date is now 2 weeks away.
Yesterday we found out completely by chance that an appeal to the Secretary of State had been lodged by the company in late July. They REALLY want to build the waste transfer site in this location, it appears.
Delving further into the details, we've now found:
a) there is huge local opposition to the site - over 600 people are involved in activist meetings, groups. £10,000 has been raised to fight the appeal. A barrister has been engaged.
b) the appeal was lodged in late July, 4 weeks before we signed contracts
c) the seller knew about the appeal - he attended meetings, wrote a detailed letter outlining his opposition (1 of 350 residents letters) and was involved in set up of the fighting fund
So now we have a problem: the seller didn't disclose this information. Neither did the estate agent, who have multiple properties for sale in the area. The solicitor completed searches before the appeal was lodged so had no knowledge either...but they didn't inform us an appeal was possible. Yes, we should have scrutinised the search paperwork more. But we naively assumed important items would be explained to us.
We feel duped by the seller, who clearly was privy to the information that an appeal to the site had been lodged 4 weeks before we exchanged. If successful, the residents' legal team have estimated a £500k to £1m affect on the valuation to the 13 house street (avg price £400k). After all, few people want to live close to a waste facility. If we do nothing and go ahead in two weeks as planned, 15% COULD be knocked off the house value within 2 months. We'll essentially have burnt our deposit within weeks that took years to save.
We'd have to endure a years worth of building work close by too - to construct a 12m high, 1 acre site. Then a 24hr waste operation thereafter.
The company is confident in their appeal - regardless of the facts in this particular case, around 40% of commercial planning appeals go through. It seems like to do nothing is a pretty big gamble.
We want to either:
1) rescind the contract on the ground that the seller and/or estate agent deliberately withheld this information. Our solicitor says that will be difficult to prove (despite the mountain of evidence we've managed to gather over the last 48hrs that all residents were actively involved, and were informed of the appeal by the company directly).
2) Get the seller to agree to put 15% of the purchase price into Escrow pending the planning appeal decision. If it's rejected for good, they can keep their 15%. If it goes through, we're compensated. We thought this would be a fair option to protect our potential downside.
Lawyers of PH... what should we do? TIA
You should have "delved further into the details" when you first found out about the planning application, many applications for all sorts of different things are rejected at the initial stage only to be accepted at appeal/reapplication when suitable changes have been made to the plans.
No one to blame but yourselves and your solicitor from what I can see.
No one to blame but yourselves and your solicitor from what I can see.
mike74 said:
You should have "delved further into the details" when you first found out about the planning application, many applications for all sorts of different things are rejected at the initial stage only to be accepted at appeal/reapplication when suitable changes have been made to the plans.
Clearly and I accept that, but we are where we are. We didn't give it due attention.mike74 said:
No one to blame but yourselves and your solicitor from what I can see.
The solicitor didn't do a great job, which is why they're panicking a bit.Recent updates to the law mean it's now less 'buyer beware' though:
http://www.telegraph.co.uk/finance/property/house-...
The information you have surfaced is public domain now and probably was at the time you signed
Signing a contract to purchase a house is a significant thing and you entering into it without giving it your full attention was silly
The 15% could be inconsequential. Do you want to live by the waste site? If not, break the contract and suffer the consequences - minimised as much as you can
Signing a contract to purchase a house is a significant thing and you entering into it without giving it your full attention was silly
The 15% could be inconsequential. Do you want to live by the waste site? If not, break the contract and suffer the consequences - minimised as much as you can
bearman68 said:
Don't buy the house then. Forfeit the deposit. Claim the depo back through legal means.
I think this is a high risk strategy. If we lose, we're 40k down + fees and no house. I'd rather chance it than go this route?Solicitor has advised to carry on and if appeal is successful then we may have a case against sellers for misrepresenting on the declaration. But they are nervous this wouldn't be a water tight case.
gfgdfgergq said:
I think this is a high risk strategy. If we lose, we're 40k down + fees and no house. I'd rather chance it than go this route?
Solicitor has advised to carry on and if appeal is successful then we may have a case against sellers for misrepresenting on the declaration. But they are nervous this wouldn't be a water tight case.
Did the buyer misrepresent?Solicitor has advised to carry on and if appeal is successful then we may have a case against sellers for misrepresenting on the declaration. But they are nervous this wouldn't be a water tight case.
JPJPJP said:
The information you have surfaced is public domain now and probably was at the time you signed
Signing a contract to purchase a house is a significant thing and you entering into it without giving it your full attention was silly
We live hundreds of miles away. Sure, we should have checked the local news more. But we figured it's the solicitors job to tell us about any important stuff. That is what we were paying them for, at least....Signing a contract to purchase a house is a significant thing and you entering into it without giving it your full attention was silly
JPJPJP said:
The 15% could be inconsequential. Do you want to live by the waste site? If not, break the contract and suffer the consequences - minimised as much as you can
Would rather chance it if there's no other way out for reasons above. At worst it's a 40% chance of an immediate 40-60k value loss. At best no problem.This is the solicitor's fault. I sold and there were questions from my buyers such as 'have you had any rows with neighbours', and 'have you ever been burgled'. My solicitor advised she would write along the lines of 'the buyers should conduct their own searches in these matters'. However, I informed my solicitor that I would reply no to both as that was the truth.
I am of the opinion that a buyer and their solicitor should make their own searches with regards this. For instance, does a seller know in detail the Local Development Plan, Flood Risk, Radon Risk, Chancel repair obligations?
I am of the opinion that a buyer and their solicitor should make their own searches with regards this. For instance, does a seller know in detail the Local Development Plan, Flood Risk, Radon Risk, Chancel repair obligations?
desolate said:
Did the buyer misrepresent?
You mean the seller?In our minds naturally yes. They knew and didn't reveal this important information 4 weeks before contract exchange, despite other regular communication.
Apparently, the hard part is proving they deliberately mislead. Solicitor said they probably took legal advice themselves on whether they had to disclose the appeal (despite being involved in the opposition campaign).
gfgdfgergq said:
You mean the seller?
In our minds naturally yes. They knew and didn't reveal this important information 4 weeks before contract exchange, despite other regular communication.
Apparently, the hard part is proving they deliberately mislead. Solicitor said they probably took legal advice themselves on whether they had to disclose the appeal (despite being involved in the opposition campaign).
Apologies I did mean seller.In our minds naturally yes. They knew and didn't reveal this important information 4 weeks before contract exchange, despite other regular communication.
Apparently, the hard part is proving they deliberately mislead. Solicitor said they probably took legal advice themselves on whether they had to disclose the appeal (despite being involved in the opposition campaign).
Misrepresentation implies that they lied - which is a bit different than staying silent on something and would be a bugger to prove. Can you ascertain if they were involved in the campaign against the planning?
If they were actively involved then it would be hard to claim ignorance.
Have you paid the deposit to the solicitor?
Pica-Pica said:
This is the solicitor's fault. I sold and there were questions from my buyers such as 'have you had any rows with neighbours', and 'have you ever been burgled'. My solicitor advised she would write along the lines of 'the buyers should conduct their own searches in these matters'. However, I informed my solicitor that I would reply no to both as that was the truth.
I am of the opinion that a buyer and their solicitor should make their own searches with regards this. For instance, does a seller know in detail the Local Development Plan, Flood Risk, Radon Risk, Chancel repair obligations?
Thanks. I suppose it's unreasonable for a seller to know everything so buyer/buyer's solicitor should definitely do the homework.I am of the opinion that a buyer and their solicitor should make their own searches with regards this. For instance, does a seller know in detail the Local Development Plan, Flood Risk, Radon Risk, Chancel repair obligations?
It does seem in this situation that seller was aware and was hoping to get the deal done, let us move in, then for us to discover from neighbours (who would immediately want a cheque to help with the residents barrister
)desolate said:
Apologies I did mean seller.
Misrepresentation implies that they lied - which is a bit different than staying silent on something and would be a bugger to prove. Can you ascertain if they were involved in the campaign against the planning?
If they were actively involved then it would be hard to claim ignorance.
Have you paid the deposit to the solicitor?
Yes we have evidence they were actively involved and have been for over 12 months.Misrepresentation implies that they lied - which is a bit different than staying silent on something and would be a bugger to prove. Can you ascertain if they were involved in the campaign against the planning?
If they were actively involved then it would be hard to claim ignorance.
Have you paid the deposit to the solicitor?
Yes we paid deposit 6 weeks ago.
gfgdfgergq said:
Yes we have evidence they were actively involved and have been for over 12 months.
Yes we paid deposit 6 weeks ago.
In that case they won't be able to claim ignorance. Yes we paid deposit 6 weeks ago.
You should definitely speak to a competent property solicitor - if you aren't confident that yours is any good then definitely look for someone new.
I certainly wouldn't proceed as things are.
gfgdfgergq said:
Pica-Pica said:
This is the solicitor's fault. I sold and there were questions from my buyers such as 'have you had any rows with neighbours', and 'have you ever been burgled'. My solicitor advised she would write along the lines of 'the buyers should conduct their own searches in these matters'. However, I informed my solicitor that I would reply no to both as that was the truth.
I am of the opinion that a buyer and their solicitor should make their own searches with regards this. For instance, does a seller know in detail the Local Development Plan, Flood Risk, Radon Risk, Chancel repair obligations?
Thanks. I suppose it's unreasonable for a seller to know everything so buyer/buyer's solicitor should definitely do the homework.I am of the opinion that a buyer and their solicitor should make their own searches with regards this. For instance, does a seller know in detail the Local Development Plan, Flood Risk, Radon Risk, Chancel repair obligations?
It does seem in this situation that seller was aware and was hoping to get the deal done, let us move in, then for us to discover from neighbours (who would immediately want a cheque to help with the residents barrister
)Perhaps withdraw if that seems the better option. Ask your bank to refund the money, stating a dispute/misrepresentation. I would imagine solicitors have their insurance against this sort of thing, they certainly have their over-arching body who may be interested. The seller's estate agent may also be at fault in this, if they are local, they should know what is going on.
This sounds like a worrying time. If there is a campaigning group, they will have minutes (I presume) membership lists, petition lists etc.
Edited by Pica-Pica on Saturday 23 September 21:42
We did turn up this recent case law from 2015:
Judge said:
Sellers have an obligation to be truthful about their knowledge of any proposed
developments affecting a property. But precisely what constitutes ‘knowledge’ and
‘affecting’ is less clear cut.
http://www.firsttitle.eu/media/6269/2015-Nov-When-must-a-seller-reveal-plans-for-development-in-the-area.pdfdevelopments affecting a property. But precisely what constitutes ‘knowledge’ and
‘affecting’ is less clear cut.
Judge said:
The effect need not, however, be
a direct physical interference‐ a material
increase in noise or smell or an adverse
effect on views from a property would in
my view potentially “affect” the property.”
Which seems pretty relevant.a direct physical interference‐ a material
increase in noise or smell or an adverse
effect on views from a property would in
my view potentially “affect” the property.”
desolate said:
In that case they won't be able to claim ignorance.
You should definitely speak to a competent property solicitor - if you aren't confident that yours is any good then definitely look for someone new.
I certainly wouldn't proceed as things are.
Thanks, we may have to make some calls on Monday if ours give us the brush off....You should definitely speak to a competent property solicitor - if you aren't confident that yours is any good then definitely look for someone new.
I certainly wouldn't proceed as things are.
Pica-Pica said:
As to your further post that the seller's were campaigning, that puts a different light on it. However, did your solicitors ask the relevant questions?
Nope, none at all.First time buying a house so we thought a 15 minute meeting to talk through the contract was typical...
It is relevant but you will have to prove they knew about the appeal.
If they say 'we did all we could to stop the planning and we were so released but we weren't aware of an appeal' how will you prove they were?
I'd be getting the solicitor to halt the sale so they have to sue you rather than you sue them.
If they say 'we did all we could to stop the planning and we were so released but we weren't aware of an appeal' how will you prove they were?
I'd be getting the solicitor to halt the sale so they have to sue you rather than you sue them.
From your OP you read about the planning application saw it had been rejected and went ahead.
The appeal had been not been lodged so would not appear.
I think you are in the clear.
Seller has same get out. Appeal after exchange. Thought had won the battle
This might be one of those that falls between the cracks.
The appeal had been not been lodged so would not appear.
I think you are in the clear.
Seller has same get out. Appeal after exchange. Thought had won the battle
This might be one of those that falls between the cracks.
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