Misrepresentation in the context of a property sale can surface in a number of ways, including representations made about rights of way or access over a property.
The basic premise of a misrepresentation claim is that;
- The seller (or their Agent) makes a false statement of fact (as opposed to opinion).
- This statement must be misleading or incorrect. It has been determined that a partial disclosure (half-truth) as to a certain fact can amount to a misrepresentation. The duty to correct any statements made is an ongoing obligation. Should circumstances change and, therefore, the basis of the original representation alters, then the purchaser must be informed of such a change.
- This statement is considered, by the buyer, as a material and fundamental statement which induces the buyer to enter into the contract. It does not need to be the sole reason that the purchaser decided to enter into the contract. It is sufficient that it was one of the reasons and formed part of their decision-making.
- Such a statement, as relied upon, causes a loss to the purchaser.
Quantum in property cases frequently focuses on a diminution in value (difference between value as represented by the seller and actual value with the true rights of way in position) of the property, plus consequential losses where the legal basis allows.
The basis of the loss can be categorised under the rules of fraudulent misrepresentation, negligent misrepresentation or innocent misrepresentation. The basis of recovery pursued will be dictated by the facts of the case and will be determined on a case-by-case basis.
In practice, claims advanced by purchasers for misrepresentation often focus on the representations made during the pre‑contract enquiries stage (e.g. the information given on a TA6), contractual preludes, or the marketing particulars circulated at the outset.
Misrepresentation applied to a right of way often manifests in the following ways:
- When a seller overstates and/or underplays the extent or use of the right of way.
- Seller states (or ticks a box) to confirm that there are “no rights of way” over the property when, in reality, there are.
- A seller fails to identify the correct route of a right-of-way.
- A seller fails to disclose the width, user class, frequency, or legal basis of a right of way.
- A seller fails to disclose known prescriptive use or informal agreements that are in existence and amount to a right that would burden the land.
- A seller fails to update replies when learning (pre‑exchange) of a discovered or asserted right.
Inaccurate statements of such a nature are ordinarily deemed to be a material consideration and can form the actionable basis of a misrepresentation claim where a buyer relies upon them.
The principle of Caveat emptor – ‘let the buyer beware’ does not protect a seller who makes a misrepresentation. A buyer may rely on the seller’s replies even if an independent investigation could have uncovered the truth. This is a key factor that any seller should bear in mind.
It is vital, therefore, that a seller gives proper and due disclosure at the appropriate times and is aware of their ongoing obligation to update/correct the representation and should circumstances change.
Our specialist team can support you with your legal rights and responsibilities so that you do not get caught out. Contact Catherine Gregson today for help.