A recent question to the Daily Telegraph’s property clinic reveals a common misunderstanding about conveyancing searches. While that is perhaps understandable, the reply he got was also somewhat misleading.
The reader said that he and his wife had recently moved house and had now noticed several defects “which we believe were missed in the searches.” Naturally they wanted to know if there was anything they could do now.
Unfortunately the reply was also inaccurate as it stated that “The searches undertaken during the conveyancing process are supposed to avoid these problems.” This is incorrect.
Why the ‘Caveat emptor’ rule is important for buyers
When buying a property it is entirely up to the buyer to check on the condition of the property. Sellers are not required to reveal any defects. This is known as the rule of ‘caveat emptor’ or ‘buyer beware.’
Of course most buyers will not be experts when it comes to inspecting a property, so a proper structural survey should be obtained from a professional surveyor. But many buyers do not appreciate the need for this, or make the mistake of thinking that the mortgage valuation is the only survey they need.
Many buyers fail to understand that Conveyancing involves the transfer of the legal ownership or title of a property from the seller to the buyer. The buyer’s Solicitor’s job is to make sure that the seller has a good title to the property and that there are no legal problems which would prevent the seller transferring that title to the buyer.
It is not the job of the Solicitor to make sure that the property is in good condition – that is a job for a surveyor.
Conveyancing searches do not cover the condition of the property
Solicitors do carry out various searches as part of Conveyancing procedures. These searches are intended to find out if there are any matters of a legal nature affecting the property which could affect the buyer. They do not cover the physical condition of the property or whether it has any defects.
The Telegraph’s expert mentioned that sellers are asked to complete a Property Information Form, and that buyers can rely on the seller’s replies. This is quite correct.
However the expert seems to have been unaware that the standard form used in most transactions does not contain any questions specifically relating to the condition of the property. If there was such a question, or a buyer’s Solicitor added such a question to the form, the response would invariably be “the buyer must rely on his own survey and inspection” or something similar.
It should also be pointed out that the form contains the following advice for buyers:
“You are entitled to rely on the replies given to enquiries but in relation to the physical condition of the property the replies should not be treated as a substitute for undertaking your own survey or making your own independent enquiries, which you are recommended to do.” (Law Society Form TA6, 3rd.edition)
If a seller did say the property was in good condition and faults subsequently came to light, a buyer might have a claim for misrepresentation. But it would be necessary to prove that the buyer relied on the misrepresentation and that the seller’s statement was in some way incorporated in the contract. Furthermore it would be necessary to trace the seller – not always an easy job.
Rather than going through the uncertain process of suing the seller it is much better to have a proper survey done before buying the property.
Don’t just rely on a ‘mortgage survey’
The newspaper’s expert rather grandly says “The survey should have identified any problems with the structure of the property. Assuming a detailed survey was carried out and the issues were not identified, you may have a claim against the surveyor.”
But the fact is that most buyers still do not have a detailed survey carried out. Many assume that the mortgage valuation – often wrongly called a survey – will reveal any defects in the property.
This is wrong – such valuations are carried out for the benefit of the mortgage lender, and are merely intended to confirm the value of the property as security for the loan.
A mortgage valuation may not even involve a physical inspection, or the survey will merely give the property a cursory ‘drive-by’ inspection. This is unlikely to reveal hidden defects.
Of course if the reader did have a full survey carried out and the surveyor had missed the defects then there might well be a claim against the surveyor. But if that had been the case presumably the reader would already have raised the question with the surveyor rather than writing to the paper.
So really the advice to the reader is that they should have had their own survey carried out before buying the property, and it’s too late to do anything now.
Our advice to all buyers is to get a structural survey done – far better to pay a few hundred pounds for this before completing, rather than discover serious defects afterwards and then find you will have to pay for the repairs yourself.