The process of selling your home can be long and stressful so you’ll no doubt breathe a sigh of relief once you get to completion. However, you could be liable for issues that come to light after this point so it might not be totally over.
While the buyer is responsible for making checks on the property so they’re fully informed about what they’re buying, you must answer all questions honestly and not give misleading information. If a problem with the property you didn’t disclose is discovered by the buyer, they could take legal action against you and claim for damages.
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How long are you liable after completion?
Under the Misrepresentation Act 1967, you could be sued if you misrepresented anything about the property, such as its condition, and this led to the buyer entering into a contract to buy it. This could be the case if you gave false information or didn’t reveal a problem you knew about, such as a defect with the property or a boundary dispute.
A buyer can usually make a claim against you for misrepresentation for six years after completion. In some circumstances, they could have three years from when they noticed the issue.
At the start of the conveyancing process, you have to complete a property information form answering a range of questions about the home you’re selling. This includes questions about the condition of the property, alterations you’ve carried out and any disputes with the neighbours. You could be sued if you answered any of these dishonestly or omitted information.
Compensating the buyer
The buyer can claim for damages from you if they relied on the false or missing information when deciding whether to buy the property and lost money as a result. This could be because the property isn’t worth as much as they thought, for example. You could also have to pay for repairs to the property to fix defects you didn’t disclose.
In extreme cases, where damages wouldn’t be enough to compensate the buyer, the court could rule that the sale is cancelled so the property would be returned to you.
Providing false information can be considered misrepresentation whether you did so intentionally, carelessly or accidentally because you believed the information was true. Describing your home incorrectly in the property details or replies to queries, such as relating to its size or boundaries, could also be misrepresentation.
You have financial obligations too. The proceeds of your property sale are used to pay off the mortgage on it if there’s one outstanding plus any extra money if they don’t cover it. Your conveyancer normally deals with this but if the mortgage isn’t paid off for some reason you’ll still be liable for it. There may also be capital gains tax to pay if the property wasn’t your main home.
Can you claim against your solicitor or estate agent?
If you believe the false information passed to the buyer was the fault of your estate agent, conveyancing solicitor or licensed conveyancer you may be able to make a claim against them for professional negligence.
As with any legal claim, you’ll need proof that they were negligent and that their actions caused you financial loss. In this case the loss would be the damages you had to pay to the buyer.
Read also: Can I change my solicitor and how?
How can you avoid legal claims after selling?
The consequences of a buyer making a claim against you once you’ve sold your property could be huge, both financially and practically, so it’s important to do everything you can to protect yourself.
Be open and honest
The number one way to avoid being sued by the buyer is to answer all questions about the property honestly, whether that’s on the property information form or elsewhere. Double check your answers and read all paperwork carefully.
Provide any information you think is relevant and that could affect the buyer’s decision to go ahead with the purchase, including documents relating to any alterations you’ve made.
Allow access for surveys and other investigations
You should be as cooperative as possible when it comes to allowing the buyer’s surveyor or any other professionals looking into aspects of your property to enter. These are the main ways a buyer will find out about the condition of the property and any money they might need to spend on it.
Make repairs you agreed to
If the buyer’s survey reveals issues and you agree to carry out specific repairs to fix them, ensure you do them. This will avoid the buyer facing unexpected issues once they move in.
Keep evidence
You should hold onto any documents that prove the condition of the property and the standard of any work you carried out as well as any guarantees. Even if you sent copies of these to your conveyancer during the sale process, it’s important to be able to refer to them if the accuracy of how you represented the property is questioned later.
Find the right professionals
Choose your estate agent and conveyancer carefully when you put your house on the market so you get the best service possible. This will reduce the likelihood of anything coming back to bite you after completion.
Take out insurance
You can take out indemnity insurance to protect you against a legal claim if a problem is found with the property once it’s sold. This could be particularly worthwhile if you don’t have the documents to show that any alterations were done properly. Your conveyancer can advise you about whether you should take a policy out.
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