To answer or not to answer? That is the question.
For those of you who have sold a property in the past, you will be aware of the reams of questionnaire forms that you are required to complete to provide information about the property to your prospective buyer.
One of these forms, the Property Information Form (PIF), contains a combination of tick box and short answer questions designed to answer the main questions that a buyer will most likely want to ask.
This all seems rather straight forward, as after all you are the seller and you would assume that you are well placed to answer all of these questions as you start confidently ticking off the various boxes.
Things become less straight forward, however, when you receive a call from your solicitor sometime after selling the property advising you that your buyer is intending to sue you for misrepresentation.
Many sellers do not realise that their responses to the PIF and any follow up questions are treated as being ancillary to the contract itself. The answers you provide do not explicitly form part of the contract but the answers you give may encourage the buyer to enter into that contract. If your answers are incorrect, even if this was not intentional, you may therefore be liable for misrepresentation as the buyer could argue that they would not have bought the property had your answers been correct.
For example, if you have accidentally ticked the wrong box having become fed up of this tediously long form or you have answered a question incorrectly having misremembered the facts, this seemingly innocent mistake could prove costly if your buyer relies on the incorrect information you have provided.
One way to minimise this risk of innocent misrepresentation (although it will not necessarily get you off the hook completely) is to express your answer as an opinion rather than a statement of fact or by simply adding ‘to the best of my knowledge’ to the end of any of the questions that you are unsure of.
If on the other hand you are not sure of the answer, then say so; simply state that you ‘do not know’ the answer. This will minimise the risk of you accidently providing incorrect information in a bid to try to answer as fully as possible. Do not under any circumstances provide an answer that is likely to be regarded as evasive, misleading, or deliberately ambiguous. Such answers have a habit of coming back to haunt tricky sellers.
Of course it is fair to say that from a seller’s perspective, this presents something of a dilemma. The seller will want to strike an appropriate balance between providing suitably qualified answers to prevent a misrepresentation claim whilst at the same time trying to provide the buyer with enough positive information to convince them to proceed with their purchase.
If you require any advice in relation to bringing or defending a misrepresentation claim, please contact the litigation team on 01242 586 841.