Investment property misrepresented

What happened?

A couple, Kaleb and Pauline, who were interested in buying a freehold investment property were misled by the agent’s marketing and paid an £8,000 exclusivity fee based on incorrect information.

The main issues

• Incorrect details: The property was advertised as being under refurbishment to become a 6-bed HMO with a 7-year lease to a social housing provider.
• Wrong address: The initial agreement listed the wrong property address, and even the named seller changed later, causing confusion.
• Missing permissions: The buyers discovered there was no planning permission or building warrants for the HMO conversion.
• No lease in place: There was also no actual agreement with the social housing provider, despite the property being advertised as having one.
• Valuation issues: A mortgage survey later valued the property at less than half the agreed sale price. The buyers withdrew after the exclusivity period had ended.

What the investigation found

The property agent failed to properly check or verify the claims made in the property advert. This led Kaleb and Pauline to make a financial commitment based on misleading information.

The outcome

The couple were refunded the full £8,000 exclusivity fee, plus £400 compensation for the inconvenience and poor service.

What we can learn

• Agents must verify claims in marketing materials, especially for investment properties.
• Buyers should ask for documentation early, and be cautious if it isn’t provided.
• Misleading or unclear information can result in serious financial consequences and formal complaints.

Please note that all names in this case study have been changed to maintain anonymity.