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Why seller’s replies to standard enquiries are important

Reasons to choose Wilson Browne

When selling or leasing a property the seller or landlord has to answer a large number of standard questions.  These questions are usually met with a groan and a sigh as there are many of them, and if you answer them correctly, take quite some time to complete.

A case highlighted the importance of considering the answers carefully and ensuring the answers are accurate. Morrell and another v Stewart and another [2015] EWHC 962 (Ch) concerned the sale of a cattery business.

Prior to the sale, the sellers had had problems with their drainage and had been advised by the Environment Agency that they had to rectify the problem. During the sale process a number of queries were raised, one of which is set out below:

Have you had any negotiations or discussions with any neighbour or any local or other authority which affect the property in any way?

There were other queries which should have prompted disclosure about the drainage issues. The sellers did not mention the drainage problems nor that the Environment Agency had advised that there was a problem. In court, the sellers argued that they had answered the questions in good faith because they thought the problem had been rectified.

The court decided that the sellers had deliberately and fraudulently misrepresented the situation and that it did not matter that the sellers thought the problem had been resolved.  The sellers were ordered to pay £33,000 in damages.

Would the sellers have been ok if the Environment Agency had only got in touch with them after the replies had already been issued but before exchange of contracts? No.  If the answers change at any time up to exchange a seller is obliged to notify a buyer.

The moral of the story: answering enquires may be tedious, but they are important and it is essential that they are accurate.

For further information on buying or selling residential property please contact our Residential Conveyancing Team; or for information on any aspect of commercial property, contact our Commercial Property Team.