I Bought a House With Problems Not Disclosed – What Can I Do?

Buying a house is one of the most significant financial commitments you’ll make. It can also be an emotional rollercoaster.

The purchase process is designed to gather as much information as possible about a property, including its strengths and weaknesses. This is typically achieved with a structural survey, searches and disclosure undertaken by your solicitor.

However, it’s still possible to end up buying a house with defects. So, what happens next, and do you have any rights of redress?

Our property litigation team has decades of experience working with individuals and companies who have purchased property with unforeseen and often undisclosed issues. If you are dealing with an issue with your property and need advice, our team is happy to help- we work nationally.

Purchasing a Home With Undisclosed Defects: What to Know

Buyers worry about two things when it comes to undisclosed defects. The first is being stuck with a property that requires expensive remedial work, for instance, damp and mould problems or structural issues like subsidence.

The second is buying a property where there is a problem that they can’t easily remedy without selling. It may include difficulties with neighbours’ anti-social behaviour, environmental issues such as odour, or a dispute over a shared boundary.

In English law, the principle of ‘caveat emptor,’ which means basically ‘buyer beware’, is still the overall legal principle. This means that it is the buyer’s responsibility to thoroughly inspect the property’s condition before purchasing it.

Sellers don’t have to say anything if they’re not asked.

It was this gap that led to the introduction of Property Information Forms.

The seller must respond honestly and accurately to all the questions on the form. It covers a very broad range of information, including disputes, potential planning applications, environmental issues, and alterations and extensions to the property.

Many defects can be identified through a full structural survey. If you have a mortgage, your lender may not require a detailed survey; they’re primarily interested in protecting their investment. But you should get your own survey to protect your own position. 

You’ll potentially be responsible for remedying issues with the house, so at the very least, you need to know what they are. A full structural survey will reveal any defects with the building’s fabric, such as subsidence and damp.

But what about other potential problems that aren’t within the remit of your surveyor? The idea is that the Property Information Form covers these. The questions are comprehensive, and the seller has a legal obligation to disclose any defects or problems upon request.

Under the Misrepresentation Act 1967, if the seller deliberately lies about the property during disclosure or omits to disclose a defect if they asked, and they knew about the defect at the time, then you may be able to claim against them.

Material Defects Typically Disclosed (Roof, Foundation, Infestations, and More)

• Structural problems include defects with the roof causing mould, damp, and rot, and foundational problems like subsidence or settlement.
• Environmental hazards such as asbestos within the building, contaminated land, or radon gas.
• Pest problems like woodworm, rodents or insects, and Japanese knotweed.
• Flood history either from the environment, such as rivers or a drainage issue, or an internal plumbing problem.
• Disclosure also includes past planning applications and decisions, building regulation consents, and any breaches or enforcement notices.

Information must be supplied on significant alterations to the property, such as loft conversions and extensions, including compliance with planning control and building standards.

The seller must disclose known latent defects, which are those that are not apparent upon inspection.

Navigate the As-Is Clause and the Final Walkthrough

The ‘as-is’ clause is part of the Standard Conditions of Sale for property in England and Wales. It’s so-called to make clear that the property is sold in its current condition, and the seller isn’t liable for repairs, remediation, or improvements.

For buyers, the ‘as-is’ clause makes it abundantly clear that they need to know what they are taking on and are fully aware of the property’s condition before the exchange of contracts.

After the exchange of contracts and before completion, a final walk-through is conducted, which serves as a last check to ensure that no issues have arisen since the last review.

Who Is Responsible for Disclosure: Sellers, Agents, and Inspectors

The seller must provide accurate information. Errors in disclosure (including omissions), if they influence your decision to purchase, may constitute grounds for a misrepresentation claim under the 1967 Misrepresentation Act. 

To build a strong case, you’ll need to be able to demonstrate that the seller was aware of the defect or problem, and either lied about it or omitted to tell you.

But if you haven’t asked the question, there is no duty to tell you. 

A property surveyor can also be held accountable in their professional capacity if they fail to identify a defect in the property. 

A full structural survey should reveal any defects with the property, including those that may be quite hidden or deliberately concealed.

If there’s an error or omission in your surveyor’s report and you relied on this report in your purchasing decision, you may be able to bring a claim for professional negligence.

The 1967 Act also applies to estate agents if they provide incorrect advice or information about a property.

4 Steps to Take If You Find Hidden Defects: Letters, Mediation, and Legal Action

If you notice problems or defects before exchanging contracts, then you’re not bound to the purchase and can withdraw. If you proceed anyway, that is at your own risk. 

If you wish to proceed, you can use the defects as leverage to reduce the purchase price or request that the seller remedy the problems at their own expense.

The seller is not obliged to do this, but many do, as these issues will likely only be highlighted by another buyer.

If you have already bought the house, then the starting point for a claim is the Misrepresentation Act 1967.

You’ll need to prove that the defect was present at the exchange of contracts, the issue affects the property’s value, and the seller was aware of the defect but failed to disclose it on request or provided misleading information about the property. 

Review and Collate Evidence

A potential claim should begin with a review of all documentary evidence, including images, film, and professional assessments from experts in the relevant field. An independent property valuation can demonstrate the financial impact on the property’s value.

Your solicitor should review all the sale documents and the Property Information Form to determine if there is any information about the defect. There could be what you now know to be a false statement on the Property Information Form in answer to a direct question and you will be able to rely on that.

Any case must be evaluated by an experienced property lawyer who can assess the basis for a claim. The stronger the misrepresentation, the stronger the remedy.

Contact the Seller

The formal process begins by putting the seller on notice that there is a defect that you have reason to believe pre-dates the exchange of contracts and which they misled you about.

Mediation

Mediation is a form of Alternative Dispute Resolution (ADR) for civil disputes, involving an impartial third party, the mediator. It’s quicker and often more effective than pursuing a claim in court, and doesn’t rule out the possibility of going to court later.

Court Action

You can go to court to seek compensation for damages, which effectively covers the cost to you for having to remediate the defect, or the diminution in value of the property (whichever is lower). There is also the possibility of claiming rescission of the sale contract though this is rarely achieved in practice.

Frequently Asked Questions

What Happens if You Buy a House Then Find Problems?

It’s vital to take prompt legal advice and review the sale process to see if there is evidence to support misrepresentation or negligence on the part of any of the parties involved. This includes the seller, the estate agent, and any surveyor. The evidence may form the basis of a claim.

What Happens if Sellers Don’t Disclose Something in the UK?

Sellers who don’t disclose something, when that information has been requested, about their property are potentially liable to pay damages to the buyer if the buyer relied on that information (or omission) to purchase the house and have suffered damage as a result.

How Long Do You Have To Report Problems After Buying a House?

Typically, you have six years to issue a claim if you discover defects after purchase. If you don’t find the problem until after six years have passed from the date of purchase, you still have three years from the date of discovery to make a claim, subject to a 15 year longstop date. 

Contact Helix Law for Expert Legal Advice to Resolve Undisclosed Property Issues

Even with the best professional help and available protocols, it’s still possible to buy a house and discover defects that the seller has not disclosed.

It’s vital to seek expert legal advice promptly to review the evidence and consider the available options, which may include initiating a claim for damages.

If you are dealing with a problem with a property don’t hesitate to reach out to our property litigation and we will be happy to help you. We have decades of experience as specialised property litigation solicitors working in similar matters, and would love to assist.