Caveat emptor. An old Latin phrase well known to us property lawyers! Roughly translated it means ‘Buyer beware!’.
In the modern world when everyday purchases of goods are heavily protected by wide ranging consumer laws, it is easy to overlook this long standing principle, but it is still very much in force when buying land or property as demonstrated in the recent high profile case of Hardy vs Griffiths.
The case involved the purchase of a property for £3.6 million. The buyers proceeded to exchange of contracts (the point in the transaction when they legally committed to buy the property) without the benefit of reading the results of a building survey.
The survey actually highlighted that the property suffered from damp and rot. On discovery of this the buyers attempted to pull out of the purchase on the basis that the state of repair of the house had been misrepresented to them in replies to enquiries given by the seller. The sellers issued court proceedings for breach of contract over the buyer’s refusal to continue with the purchase.
The court found that the sellers had not attempted to hide the damp and act fraudulently. The sellers simply answered the relevant question saying they were not aware of any damp or rot issues but that as it was an old property their reply could not be taken to be a warranty (a legal promise) as to the condition of the property. The Court found in the sellers’ favour and ordered the buyers to pay the sellers the cost of the deposit agreed in the sum of £150,000 and damages for breach of contract of £210,000.
This high profile and rather expensive example serves to demonstrate that the rule of caveat emptor applies when purchasing property and land and that the buyer accepts the physical state of property at the time of exchanging contracts to buy it. This not new law. If you are purchasing property or land, the onus is very much on you to investigate, search and investigate some more so that it is clear exactly what you are buying!
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