With the recent case of the billionaire’s daughter suing for £36million after “moths infested Notting Hill mansion” being prominent in the news, it would be an ideal time to highlight the principle of “buyer beware”.
Understanding “Buyer Beware” in Property Transactions: What You Need to Know as a Buyer
As a solicitor acting for property buyers, one of the key principles you must understand when purchasing property is caveat emptor, or “buyer beware.” This long-standing legal doctrine places the responsibility on buyers to thoroughly investigate the property they intend to purchase. While the process can feel complex, knowing your rights and obligations will help you make informed decisions and avoid costly mistakes.
What Does “Buyer Beware” Mean in Property Transactions?
The principle of buyer beware essentially means that the buyer is responsible for checking the condition and legal status of the property before completing the purchase. Once contracts are exchanged, you generally cannot claim against the seller for issues with the property unless they made specific representations or warranties.
The law assumes that buyers are purchasing property “as seen,” and it is not the seller’s duty to disclose defects, whether they are physical, structural, or legal, unless directly asked.
Key Areas of Due Diligence
To safeguard yourself under the principle of buyer beware, you need to perform thorough due diligence in several critical areas:
- Physical Inspection
A property may have visible issues, such as cracks in walls or dampness, and hidden problems, such as subsidence or defective wiring. To uncover these, it is essential to commission a professional survey. Surveys come in various levels, ranging from basic condition reports to full structural surveys. Choosing the right one depends on the property’s age, type, and your level of concern about potential defects.
- Legal Investigations
As your solicitor, we will conduct extensive legal checks, including:
- Title Checks: Ensuring the seller has the legal right to sell the property and identifying any restrictive covenants, easements, or charges on the title.
- Searches: Local authority searches can reveal planning permissions, or potential developments nearby. Environmental searches might highlight risks such as flooding or contamination.
- Leasehold Issues: If the property is leasehold, it is vital to check the length of the lease, ground rent, service charges, and any restrictions on use or alterations.
- Seller’s Representations
While sellers must answer pre-contract enquiries truthfully, they are not obligated to volunteer information about defects. If you have specific concerns particularly after having viewed the property, you should highlight these to your legal adviser who will raise targeted questions to obtain more clarity from the seller.
Protecting Yourself as a Buyer
- Invest in Insurance
In some cases, it may be appropriate to take out indemnity insurance to protect against issues that cannot easily be resolved, such as a lack of building regulations approval for past alterations.
- Read the Fine Print
Your legal adviser will carefully review the contract and highlight any clauses that might disadvantage you. For example, a “sold as seen/as is” clause might attempt to limit the seller’s liability for issues discovered after the sale.
You should also carefully check the responses to the property information form completed and supplied by the seller. Although your legal adviser will check these you should consider them from a practical view and from your knowledge of the property having viewed it.
When Can a Seller Be Liable?
There are exceptions to buyer beware. If a seller knowingly conceals defects or provides false information, they may be held liable for misrepresentation. However, proving this can be challenging and costly.
Final Thoughts
As your legal adviser, our role is to ensure that you are fully informed about the property you are buying and its associated risks. While buyer beware places significant responsibility on you as the purchaser, a proactive approach, supported by professional advice and due diligence, can minimize potential pitfalls.
If you are considering purchasing a property and need guidance, feel free to contact us for tailored advice. By working together, a buyer and their legal adviser can navigate the legal complexities and help ensure the purchase is a sound investment.
Judith Manser is a partner and head of the residential property team at Wollens and can advise on complex conveyancing matters.
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