Freehold and Leasehold - Misleading Omission

Published on Tuesday, 09 July 2013. Posted in Case Studies


Having purchased the property which was sold as a three bedroom detached house, the buyers, Mr and Mrs E, complained that the Agent had not informed them, either during viewings or via the particulars, that the property actually consisted of two parts; a freehold title on the former ground floor shop and a leasehold title for the former first floor flat. Mr and Mrs E also claimed that the rear garden was not included in the sale, despite it being detailed within the sales particulars.


In their submission to my Office, the Agent acknowledged that they had been aware of the different titles on the property but claimed that they had notified Mr and Mrs E verbally of the situation. Their file made no record of this information being divulged to Mr and Mrs E either verbally or in writing. Furthermore, in replying to Mr and Mrs E’s complaint, the Agent had not contested the claim by stating that they had verbally provided this information. It was also clear from the Agent’s file that they had not made any reasonable enquiries of the seller in relation to the extent of the external area of the property, especially in light of their
knowledge of the two different property titles.


In my view, the Agent’s failure to accurately represent the property within the sales particulars had caused Mr and Mrs B a degree of avoidable aggravation, distress and inconvenience, when they discovered the true position via their solicitor. I, therefore, supported the complaint but in reaching my award, I also took into account that regardless of the Agent’s shortcomings, Mr and Mrs E chose to continue with the transaction without any attempt to renegotiate the sale price. I was not persuaded that Mr and Mrs E had been financially disadvantaged as, during pre-contract negotiations, the seller purchased the freehold interest in the part of the property that had been leasehold, to enable the transaction to proceed. I, therefore, made an award of £200 to reflect the distress, aggravation and inconvenience.



If information which could be considered material under the CPRs is divulged verbally, it is in all parties’ interests to ensure that a record is made and shared with the other party concerned. Important material information should always be documented to provide an audit trail of the agent’s actions.