Within two weeks of moving into the property the Buyers (the complainants) discovered extensive flooding to the rear of their back garden.
The Buyers explained that on the day they moved in, a neighbour had told them that the garden had flooded regularly and had done so for years. Upon further conversations with a different neighbour, they discovered that a friend of the neighbour viewed the property where the Seller had informed them of the flooding in the garden as it was flooded at that time.
The Buyers supplied photo and video evidence of the flooding showing that it had reached a level of 15 centimetres and remained for up to two weeks at a time, which made the garden unusable and unhygienic due to the stagnant water. The Buyers gave two estimates of the costs of resolving the flooding issue, along with the proposed plan to install an extensive drainage system, raise the low level of the garden and re-turf.
The Buyers considered that the Agent was, or should have been aware, of the flooding and argued that had they been told about the problem they would not have purchased the property.
The Agent responded by stating that they had no knowledge of flooding within the area, or at the property itself within the last 5 years, adding that the Seller had not mentioned this. The Agent therefore argued that they had not willingly or knowingly withheld information about the property. They further pointed out that this was a matter that the Buyers’ solicitor should have picked up as part of their searches.
The sales particulars produced by the Agent seemed to give an accurate description of the property in line with TPO Code requirements and the Adjudicator did not believe there were any inaccuracies present.
The Agent had also explained the relationship of the Seller to the agency, being a member of staff’s mother, adding that the staff member took the pictures of the property, some of which included standing water in the corner of the garden. The Agent commented that the photographs had been taken two weeks after a severe storm had hit the area and so they believed the standing water was a result of the storm and therefore didn’t feel it was significant.
The Adjudicator undertook some research that showed that the property was in the lowest flood risk category on the Environmental Agency Flood Risk map. The flooding in the garden therefore appeared to be due to the property’s specific topography in relation to the adjacent buildings rather than being caused by any external factors. As such, the Adjudicator concluded that it could not be expected that a solicitor would be able to identify if the property suffered from flooding through a standard property search, or similarly, for a surveyor to do so if no standing water was present during their visit.
The Adjudicator also noted that the Buyers would need to have the repairs completed should they wish to sell the property in the future as this would have an impact on the price of the property.
Under Paragraph 7i of the TPO Code, agents must disclose any important information of which they should be aware of in relation to the property. Furthermore, the National Trading Standards Estate Agency Team ‘Guidance on Property Sales’, paragraph 4.13, states “Crucially, you cannot avoid liability for misleading by omission by adopting an 'ask no questions, shut one's eyes and close one's ears' approach.” Accordingly, agents have a duty of care to both sellers and buyers to take all reasonable steps to ensure they are aware of any major defects to the property and to disclose this information to allow consumers to make informed decisions.
In this case, there was substantial supportive evidence to conclude that there had been a material omission made by the Agent regarding the flooding to the rear garden. This was because of the staff member’s knowledge of the property through his relationship with his mother and, importantly, that the Agent’s own photographs should have alerted them to ask further questions about the standing water.
The Adjudicator therefore concluded that the Agent’s failure to ask further questions following the discovery of the standing water had resulted the Buyers being unable to make an informed decision about the property at the point of offer.
The complaint was supported and the costs of fixing the flooding issue were included in the award of £20,000.