Who Owns the Loft?
Complaint
Shortly before exchange of contracts was due to occur, Mrs G, the buyer, raised a number of complaints against the Agent in relation to the sales particulars and the information verbally provided to her during viewings, both of which indicated that the loft space attached to the top floor flat formed part of the property and had the potential to be converted into a further living space, but which her solicitor had subsequently discovered was not necessarily the case. The Agent responded by stating that the property had been marketed on the basis of its potential and on the information provided and approved by the sellers.
Investigation
The branch file recorded that, during the market appraisal of the property, the Agent had made a note to check the ownership of the loft space. Thereafter they had received information from the sellers that the lease was ‘ambiguous’ regarding the ownership of the loft space. The Agent responded asking the sellers to seek confirmation of their ownership of the loft space, pointing out that this was an issue likely to give potential buyers and their legal representatives concerns. The sellers responded stating that they would make further enquiries. However, there was no subsequent record concerning the result of those enquiries or any indication that the Agent took other steps to seek further clarification.
Several weeks after this exchange the Agent sent draft sales particulars to the sellers for their approval. The particulars referred to a large attic space and stated that it had potential to be converted into another bedroom adding immediate value to the property. The sellers approved the particulars and marketing commenced.
Outcome
Whilst I was unable to reach a decision regarding what was said during conversations held at the viewings, it was apparent from the Agent’s file that, although they had complied with their obligations under Paragraph 5i of the TPO Code of Practice by requesting the sellers’ approval of the sales particulars, they had not acted in accordance with Paragraphs 5j and 5k as they were aware that there was ambiguity regarding the ownership of the loft space and yet chose to market it in a way that suggested the sellers owned it. Furthermore, they did not obtain clarification from the sellers or their solicitors regarding ownership prior to marketing or put a note on the sales particulars to specifically say that any potential buyers should carry out investigations into the ownership of the loft space. It was also clear that the Agent had not acted in accordance with Paragraph 5h of the Code of Practice, as the fact that the loft space was not necessarily included within the Property was clearly ‘material’ information that should have been brought to Mrs G’s attention at the outset. In supporting the complaint and making an award of £250, I also took into account the fact that Mrs G became aware of the problem prior to exchange and was willing to proceed with the transaction after negotiating a price reduction.
Learning
If an agent has any doubt about a statement they wish to make about a property, they are obliged to take reasonable steps to ensure that the information is correct before marketing commences. If a doubt remains, either consumers must be advised of the issue at the outset or marketing must not commence until the matter is clarified.