In this case Mr C was attempting to purchase a flat with the intention of converting the loft space and letting it to a lodger to help him pay the mortgage. He was initially informed by the Agent that the loft space belonged to the flat. However, on checking the lease, his solicitor found that this was not the case and the sale fell through, by which time Mr C said that he had incurred costs in the region of £700 and sought compensation from the Agent.
The Agent acknowledged that although the sales particulars approved by the seller did not refer to the loft space (and were therefore correct), Mr C had been given misleading information orally that the loft was included in the sale. The Agent immediately apologised for their error and tried to find ways of enabling Mr C’s purchase to proceed. They established that the Council which owned the loft space was willing to sell it and also explored the option of Mr C buying the freehold in conjunction with the owners of the downstairs flat. However, both of these options involved costs which Mr C was not prepared to bear, feeling instead that the seller should either pay or reduce the price accordingly. The seller refused and sold to another buyer at the same price.
I was satisfied that the Agent had not deliberately intended to mislead Mr C, but that they had, nevertheless, done so and had acknowledged this. I accepted the Agent’s explanation that the misunderstanding had arisen because the Agent’s staff assumed that the loft belonged to the top-floor flat as access was from the flat rather than the communal hallway and, as such, they had only asked the seller whether the flat could be converted, rather than whether he owned it.
I agreed that the seller’s actions (including agreeing to a survey by loft conversion specialists) had reinforced the Agent’s mistaken assumption, but I criticised the Agent for making such an assumption and for failing to satisfy themselves that the information they were giving Mr C was accurate. At the very least, I considered that they should have made it clear that they had not seen the lease and that a solicitor would need to confirm the position.
I took account of the fact that the Agent had apologised and done all they could to enable the transaction to proceed in making my award of £250. I did not consider that the monetary award should be based on Mr C’s costs as I could not be sure he would not have bought the property if he had been accurately advised by the Agent; that he could have mitigated his costs to some extent if he had asked his solicitor to confirm the legal position at a much earlier stage, given the loft was a major aspect to him; and that no evidence of the costs was provided by Mr C.
It is essential that the seller is questioned about the full extent of the property to be sold, especially in the circumstances where the property forms part of a larger building. The misdescription in this case was a misleading action under the CPRs.