So you’ve decided to sell your house, great! Now the job is to try to make your house as appealing and valuable as possible. But what if the reason you’re selling is because of a major issue with your house? It seems counterintuitive to disclose information that will put off a buyer, but legislature now dictates that it is no longer ‘caveat emptor’ or ‘buyer beware’ when it comes to selling a property. If you don’t disclose all information on your property it could come back to bite you. So, what do you have to declare when selling a house?
In 2013 the Property Misdescriptions Act 1991 was repealed, and in its place now stands the Consumer Protection Against Unfair Trading Regulations 2008 (a.k.a. Consumer Protection Regulations or CPRs). The CPRs state it is the responsibility of the seller to disclose all known information on their property that could affect the buyer’s decision to purchase. Although for various reasons this may be difficult when selling a property through auction: we advise you check the requirements of disclosure if you want to go ahead.
Before marketing your property, your agent or solicitor should ask you to fill in a Sellers Property Information Form (a.k.a. Property Information Questionnaire, SPIF or TA6 form) that will provide information to the buyer that they wouldn’t be able to find through surveys or standard searches. What an individual declares when selling a house is up to them, but it should be correct to the best of their knowledge and contain no intentional misrepresentations: people who experience problems after buying a house that weren’t declared have the right to sue the seller for damages. The new CPRs answer the question of “what do you have to declare when selling a house”, which as is follows:
- Latent defects, which are problems not visible to the naked eye or to an initial inspection – some of these include asbestos in the ceiling or high carbon monoxide levels in the air.
- Major problems found in previous surveys.
- Applications for planning permission, whether they are pending, approved, or have been denied.
- Proposals for nearby development/construction.
- Reasons for previous offers falling through – this could be anything from a change of heart to being informed the house may be haunted!
- Location of the house – does it lie beneath a flight path? Or is it near to a motorway, power plant or substation?
- Any problems with neighbours, including boundary disputes, noise arguments, and whether or not a nearby neighbour has an ASBO.
- Any known neighbourhood burglaries, murders or suicides.
- Any outstanding debts that are associated with the property.
- Pests or problem weeds that are associated with the property, for example rats, bats or Japanese knotweed.
- Any alterations or building work carried out to date on the property – certificates, applications for development and planning permission details should be included too.
- Buildings insurance details.
It is important not to leave out any details either, as if found at a later date it could come across as misrepresentation.
Max Real Estate Exposure state that “every seller is forced to balance the desire to make money off of the home with the need to disclose known issues”. While TA6 forms aren’t compulsory to fill out, they’re undoubtedly a marker of confidence and professionalism for a potential buyer considering your house. So what happens to people who intentionally alter their TA6 forms to try to sell their house for a better price?
If your TA6 form isn’t fully filled out, the buyer/estate agent may want to know why. Whilst they can not force you to declare missing information, refusing to answer questions will raise a flag on your property and its ability to sell. The buyer will be informed of the missing questions and may well withdraw their offer.
It’s tempting to fib about something, or not declare everything, when selling a house in order to close a sale quickly and for a better price. And usually the seller will believe that they’re off the hook. However, if the new owner finds something that was lied about, they can sue you for damages. Plus, nobody likes to be lied to in the first place.
In a sneaky move, some people will give vague answers in order to hide deal-breaking information without incriminating themselves. It may seem like the perfect compromise has been found, however half-truths can be considered to be a form of misrepresentation. When being taken to court, if a buyer can prove that you’ve misled them or bent the truth you can be prosecuted. It’s also worth noting that new versions of the SPIF make it harder to give vague answers.
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The worst has happened. You’ve been caught out. You’ve been taken to court over misrepresentation when selling your property. To make matters worse, under the 1967 Misrepresentation Act it is now the responsibility of the seller to prove their innocence. If found guilty, the court can order you to pay damages. In more extreme cases a rescission of the contract can be ordered where you have to buy back your house and cover the buyer’s expenses, or even worse, face imprisonment.
It’s therefore vital that a seller is clear on the question of “what do you have to disclose when selling a house” to avoid property misrepresentation and being sued.
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There can be a considerable grey area when deciding on what information is relevant to disclose and what isn’t. For example, is it worth mentioning a spat you had with a neighbour a few years ago, even if the issue has now been resolved? Or what about next door’s puppy who barks a lot, but in a year will have grown up and may not bark as much?
Relevance varies on a case by case basis. There is a large amount of subjectivity involved in making these decisions, which can make this process difficult and frustrating. To navigate these difficult waters, fastsalehomes.co.uk have prepared a few tips:
- Consider the issue in the eyes of a ‘reasonable’ buyer’ – as Howells puts it, if a reasonable person will consider something a negative factor, it should be disclosed.
- Consider context – if your prospective buyer is in their twenties and single, chances are a nearby bar or club won’t be as much of an issue as it will be to a young family.
- Consult with a solicitor – if you still can’t decide, consulting with your estate agent or solicitor should clear the confusion on what do you have to declare when selling a house.