A case that the Property Ombudsman was asked to review came from buyers concerning their ‘PRC’ property. They had purchased in 2011 and were now encountering difficulties trying to sell. This complaint fell within the Ombudsman’s Terms of Reference, the buyers having made a complaint within 12 months of becoming aware of the issues.
The property was of a non-traditional construction, known as an ‘Airey type’. Such properties were built using pre-reinforced concrete materials (hence, the ‘PRC’) which were subsequently considered defective. Because of this, such properties became ‘unmortgageable’ unless repairs were carried out by an appropriate scheme (a PRC scheme).
The buyers purchased the property with mortgage funding; the nature of the construction was discovered during the conveyancing period, through a survey arranged by the buyers’ mortgage lender. The purchase completed, with the mortgage lender being satisfied that the property had been repaired by an approved scheme. Having encountered problems trying to sell the property and discovering that the scheme who carried out the repairs were not approved and so no certification existed, the buyers complained. They said that the agent had confirmed that the certificate was in place, thus allowing the sale to proceed; this they said was "a false representation".
The buyers stated that to resolve the complaint they would like:
- The property to be bought by the agent, the solicitors or the mortgage provider, or all together, for the full market value as they believed them to be at fault.
- The return of the initial deposit paid when they purchased.
- Compensation for all mortgage payments – they did not consider that they should have been paying a mortgage, including interest, on an ‘unmortgageable’ property.
- Compensation for the stress the situation has caused.
The agent referred to the buyers’ survey report, which suggested that confirmation should be sought that the improvement works were carried out under a PRC approved scheme and which also stated ‘Legal adviser to confirm’. The agent said that it was not their responsibility to check the validity of that confirmation; they explained that their staff obtained a copy of the confirmation from the seller; this confirmation was provided to TPO and confirmed that the property was completed under an approved PRC Scheme.
On investigation it was noted that when purchasing, the buyers had received their survey report and had thereby being made aware of the nature of the construction. On receipt of the survey, the buyers had emailed the agent to ask if their client (the sellers) were able to confirm that the relevant work had been carried out. The sellers provided the relevant certificate to both the agent and their solicitors and the agent had passed a copy to the buyers.
The Ombudsman agreed with the agent in that it was the responsibility of the buyers’ solicitors to seek this confirmation and it was noted that the buyers’ solicitor confirmed to them that they had received the confirmation from the sellers’ solicitors.
In this case, the agent had received confirmation from the sellers that the property “was completed under the [noted] Scheme” and had passed this to the buyers. This did not, in the Ombudsman’s view, make them liable for the accuracy of the information. The agent had not provided any confirmation directly themselves nor were they were asked to (it was not their role to do so in any event). The Ombudsman took no issue with them for passing on the information and the decision to proceed based on that and to lend on the property was not that of the agent.
Furthermore, there was no evidence to suggest that, prior to the survey being conducted, the agent was aware of any likely difficulty in obtaining a mortgage that they would have been expected to relay to the buyers. The survey report at that time suggested that the nature of the construction was unlikely to have been readily visible and the exterior of the property did not indicate its internal structure.
At the time of completion, a mortgage was provided for that purchase; the property was not ‘unmortgageable’ at that time as the lender was satisfied to lend on it. As explained by the mortgage company and commented on by the agent, the criteria under which mortgages are provided vary over time and in recent times such criteria have become more stringent.
While having a great deal of sympathy for the buyers for the difficulties that they had encountered, the Ombudsman did not find that this has come about through any shortcomings or wrongdoings by the agent. As such, she was not persuaded that the agent was responsible for the difficulties faced by the buyers.
The Ombudsman did not support this complaint and hence made no award.