Mineshaft - Misleading Omission

Published on Thursday, 05 December 2013. Posted in Case Studies


In this case, the potential buyers, Mr and Mrs A, alleged that the Agent had failed to inform them that there were environmental issues in respect of the Property and asserted that, had they been made aware, they would not have proceeded to make an offer and thereafter incurred the costs that they did.


From the Agent’s file it was apparent that a previous buyer had withdrawn from the transaction, but the reasons for his decision were unclear. Furthermore, I was unable to conclude what the exact situation was with the Property concerning the potential existence of a mineshaft. However I was satisfied that there were environmental issues (as highlighted from the result of a Mr and Mrs A’s solicitor’s search). It was also apparent that despite Mr and Mrs A being made aware of the details of the failed environmental search, they had instructed a second survey to be undertaken.


Due to Mr and Mrs A instructing a second survey after they had been made aware of environmental issues, I was persuaded that they would have attempted to proceed with the transaction regardless of those issues and therefore would have incurred the costs that they were seeking from the Agent. However, I was also persuaded that there was sufficient evidence, by way of a letter from the Agent, to conclude that the Agent had prior knowledge that there was an environmental issue but that they did not inform Mr and Mrs A of this as they were obliged to do in accordance with Paragraph 5h of the TPO Code of Practice. I, therefore, supported the complaint to that extent and, along with a number of complaint handling failures, made an award of £350.


Paragraph 1h of the TPO Code of Practice requires full and clear written records to be kept by the Agent of all transactions. In this case, had the Agent done so, the previous buyer’s reasons for withdrawing would have become clear. More importantly, if that reason was due to a significant problem directly relating to the Property, that information would be deemed material to any subsequent buyer’s decision whether to view and offer on the Property. Withholding such information is a breach of Paragraph 5h of the TPO Code of Practice and is likely to be deemed a misleading omission under the CPRs.