The importance of providing up-to-date information14 Jun 2016
On the sale of a property, a seller will typically provide replies to enquiries for the benefit of the buyer. If that information changes before contracts are exchanged then it is imperative that the seller updates its solicitor so that, in turn, the buyer can be given the updated information. There are potentially serious issues if this is not done.
A recent case examined this scenario. During the sale of a commercial property, the seller had a dispute with the principal occupational tenant in relation to the payment of service charge. The initial information provided to the buyer made clear that there were no such issues. Although this was accurate when first prepared and submitted, the existence of the new dispute should have been clearly and actively communicated to the buyer. This was not done.
The buyer subsequently committed to the purchase by exchanging contracts, and afterwards became aware of the tenant dispute. The buyer sought to bring the contract to an end and claim damages from the seller. Ultimately the matter ended up in the High Court, who decided that the seller had made a misrepresentation in a fraudulent or reckless manner. The buyer was entitled to the return of its deposit and damages of almost £400,000 to compensate the buyer for its wasted costs.
If you are selling a property, you must make sure that information provided to the buyer is kept completely up to date. If you do not know if information is relevant, please speak to the person dealing with your sale who can advise you.
If you have any queries regarding this article, please contact us or speak to property partner Adam Hymes on 0161 832 3434.