Annual Report: Undisclosed Planning Application

 

Annual Report Case Summary: Undisclosed Planning Application

This case concerns a dispute referred to The Property Ombudsman (TPO) from potential buyers concerning the agent’s failure to disclose material information about the property in respect of a planning application that had been submitted for a proposed development of 850 houses on the other side of the road from the property. The complainants considered that the noise and disruption of any such construction and the loss of ‘green space’ near the property would significantly affect its value and withdrew from the purchase.  They were seeking a refund of all costs incurred and compensation for the inconvenience and waste of time they had spent pursuing this purchase.

The complainants were adamant that had the agent made them aware of this planning application they would not have viewed the property.  The agent said that they were aware of the planning application but had not realised that the area included in the application was near the property.  The agent advised thattheir understanding was that they were not required to research issues outside the line of their business, such as matters that a surveyor or conveyancer would investigate.

 

The obligations contained within Paragraph 7i of the TPO Code of Practice and the Consumer Protection from Unfair Trading Regulations 2008 required the agent to disclose any information of which they were aware or should have been aware of in relation to the property in a clear, intelligible and timely fashion and to take all reasonable steps that all statements made about a property, whether oral, pictorial or written, were accurate and were not misleading. All material information must be disclosed and there must be no material omissions which may impact on the average consumer’s transactional decision. 

It was not disputed by the agent that they were aware of the planning application.  The Case Officer researched the matter and noted that the planning application, submitted two months before the complainants viewed the property, clearly identified the area in question. The Ombudsman considered that this provided the agent with sufficient time to have established exactly the area to which the application related if they were unsure of the same.

In light of the close proximity of the development to the property and the potential issues that could arise as a result (such as increased volume in traffic), it was considered that the existence of the planning application was material information that the agent was either aware of or should have been aware of.  The planning application for the proposed development should have been disclosed to the complainants, it was not and the complaint was supported.

In reaching a decision as to the award, it was noted that the complainants stated that had they known about the planning application they would not have viewed the property and incurred costs as a result.  However, when the complainants became aware of the planning application they sought to negotiate a £9,000 price reduction with the sellers. If the existence of the planning application was significant to the extent claimed by the complainants, it would have been reasonable to expect them to have immediately withdrawn from their proposed purchase rather than seek to buy the property at a lower price. The Ombudsman took the view that had the sellers accepted the complainants’ reduced offer, it was likely that the complainants would have proceeded with the purchase.  The reduced offer was not accepted and the complainants withdrew from the purchase.

The Ombudsman was not persuaded that this information affected the complainants’ transactional decision to the extent that they would not have viewed the property had they known, but rather impacted on the price they were prepared to pay for the property. In light of this, no award was made for the speculative financial loss.  An award of £400 was made for the avoidable distress, aggravation and inconvenience caused to the complainants by the agent’s failure to disclose information, of which they should have been aware, at the earliest opportunity.

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