Caveat emptor. A phrase well known to real estate lawyers and roughly translated as buyer beware! However, with almost all everyday purchases of furniture, cars and electrical items being protected in some manner from defects by consumer law, caveat emptor is sometimes overlooked when buying land or property.
In the recent case of Hardy v Griffiths a £3.6 million house was being purchased without the benefit of a building survey having been carried out prior to the buyer exchanging contracts. The property turned out to be suffering from damp and rot, discovered by a survey commissioned by the buyer’s lender. As a result the buyer did not want to proceed and tried to pull out of the purchase. He failed and lost his deposit (£150,000) and had to pay damages (£210,000).
The buyer tried to use the legal argument that the sellers had misrepresented the state of the house in replies they had given to enquiries made before the purchase. The sellers had not acted fraudulently in hiding the damp or saying they knew nothing about it when they did. They simply answered the relevant question saying they were not aware of any such (damp or rot) issues but that as it was an old property their reply could not be taken to be a warranty as to the condition of the property.
The Court held in the sellers’ favour and stated that the rule of caveat emptor applied and the buyer accepted the physical state of the property at the time of exchanging contracts to buy it. The Court also held that there was no misrepresentation as the reply given by the sellers was truthful and made it clear that the buyer should get a survey.
This is not new law. There have been a number of cases relating to the buyer of property making sure it is satisfied that it is getting what it wants. It is important for buyers to realise that the onus falls on them to investigate, search, question and investigate further. Failing to get a survey carried out is always going to put a buyer on the back foot when it comes to arguments of misrepresentation over the state of a building.
With almost all everyday purchases being protected in some manner from defects by consumer law, caveat emptor (buyer beware) is sometimes overlooked when buying land or property.