Mr and Mrs A were potential buyers who had to withdraw their offer when their building society (which had already agreed a mortgage in principle) refused to lend on the property because the survey revealed it to be of a non-traditional ‘rendered’ concrete construction. Mr and Mrs A argued that the Agent should have informed them of this information at an early stage to have enabled them to have checked with their building society before incurring the expense of a survey. The Agent’s response was that the situation had occurred because Mr and Mrs A were limited, due to their age, to using a specialist lender. The Agent also pointed out that they had sold similar houses on the same development (including, subsequently, the property in question) and the construction of the properties had not been an issue.
I was satisfied that there was no question of the Agent having deliberately misled Mr and Mrs A and I accepted no previous difficulties had arisen when selling other properties of this type on the development. I also accepted that the mortgage options of Mr and Mrs A were significantly limited due to their age. However, I pointed out that Paragraph 5h of the TPO Code of Practice obliged agents to act in accordance with the CPRs under which they had a duty to provide consumers with ‘material information’ necessary for them to make an informed decision. I commented that, in practice, this means that an agent is obliged to mention significant nonstandard features about a property which, in this case, was necessarily the non-standard construction of the property, especially given that this sort of construction had been associated with the risk of ‘concrete cancer’ to the extent that some lenders were unwilling to lend on such properties.
I concluded that the non-standard construction was a feature which should have been mentioned in the Agent’s sales particulars. Furthermore, I considered that it was an issue that the Agent should have investigated further when Mr and Mrs A specifically asked about the structure of the property during the viewing where they also explained the difficulties they had encountered in obtaining a mortgage from mainstream lenders. I, therefore, supported the complaint and made an award of £330 which took into account Mr and Mrs A’s survey costs.
Click here for Learning Points from the CPR Cases