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
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-...
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.
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.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).
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.
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...
desolate said:
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?
Went to visit sellers today to have a conversation. They were out, but we chatted to the lovely neighbours who invited us in for a cup of tea. They were up front about discussing the appeal back in early July with the sellers. All residents were leafleted and on their action group mailing lists too. Neighbours incidentally planning to move out now because they can't take the stress of a successful appeal by the company. Fun times.
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?
Went to visit sellers today to have a conversation. They were out, but we chatted to the lovely neighbours who invited us in for a cup of tea. They were up front about discussing the appeal back in early July with the sellers. All residents were leafleted and on their action group mailing lists too. Neighbours incidentally planning to move out now because they can't take the stress of a successful appeal by the company. Fun times.
desolate said:
I'd be getting the solicitor to halt the sale so they have to sue you rather than you sue them.
A risky strategy though..surveyor said:
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.
This gets the solicitor off the hook because it fell between the cracks in term of the searches. Appeal was lodged after searches but before contract signing.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.
Seller does not have this get out - they knew 4-6 weeks before exchange!
desolate said:
Did they know about the appeal when they completed the declaration?
Residents were emailed to inform them of the appeal a few days before declaration form was signed. If we assume sellers did not read email, and did not speak to neighbours, and did not see their post with appeal leaflet that week.....then they were unaware at time of declaration. I find this VERY hard to believe given what neighbours said today about their communication.But let's assume they were unaware. Do they not have an obligation to update estate agent or solicitor post declaration, or is it a line in the sand at that point in time?
Sheepshanks said:
There might be useful stuff in this thread: https://www.pistonheads.com/gassing/topic.asp?h=0&...
Thanks, seems like they got a good outcome.Shappers24 said:
Something isn't right with the timeline here. Applicants for planning applications have to notify of a planning appeal within 6 months of the decision notice being issued, which if you said was last year then would have had to been before June.
I also doubt with it being so close to residential properties would be operating 24 hours a day. Have you got a link for the planning application from the councils website? The development may not be as bad as you suspect. Just because local residents kick up a stink doesn't mean it will be a problem...
Sorry, the decision notice was issued in January, and appeal lodged end of July.I also doubt with it being so close to residential properties would be operating 24 hours a day. Have you got a link for the planning application from the councils website? The development may not be as bad as you suspect. Just because local residents kick up a stink doesn't mean it will be a problem...
The reason it was rejected by the council initially was due to the proposed 24hr operation, and the possible odour and noise so close to residential area. Perhaps the appeal will be successful because the company will 'prove' they will mitigate these issues. Obviously the residents have little faith that would actually happen..
I don't really want to link because it's an ongoing situation with regards to what we are going to do.
silentbrown said:
They hadn't exchanged contracts.
I think a key bit would be what, if anything, the seller put on the TA6 form.
"If you give incorrect or incomplete
information to the buyer (on the Property Information Form (TA6) in writing or in
conversation, whether through your estate agent or solicitor or directly to the buyer), the
buyer may be able to make a claim for compensation or refuse to complete the purchase."
Good luck with this, OP: Hindsight is easy, but all this stuff should be available online in council planning files. You can quickly check for stuff like this before you even decide to view.
Thanks, since the declaration was left blank by the seller that might constitute incomplete information.I think a key bit would be what, if anything, the seller put on the TA6 form.
"If you give incorrect or incomplete
information to the buyer (on the Property Information Form (TA6) in writing or in
conversation, whether through your estate agent or solicitor or directly to the buyer), the
buyer may be able to make a claim for compensation or refuse to complete the purchase."
Good luck with this, OP: Hindsight is easy, but all this stuff should be available online in council planning files. You can quickly check for stuff like this before you even decide to view.
We did check council planning etc but didn't consider an appeal would happen. Seems no one else along the way thought they would mention this a possibility either !
Will see what solicitor says on Monday, I think they are panicking a bit for doing a rush job on this.
Shappers24 said:
No problem. Was just interested in having a read through the statement of case; having spent over ten years working in planning dealing with a number of appeals... wanted to see whether they were chancing their arm or actually had a good case for appealing.
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