An agent did not mislead a potential buyer by failing to disclose the existence of a mineshaft at a property, a judge has ruled.
The landmark case involved, for the first time, a case being brought under the Consumer Protection from Unfair Trading Regulations 2008.
The legislation replaces the Property Misdescriptions Act and makes it incumbent on agents to reveal material facts about a property, even when they are not obvious.
Last autumn, Beresford Adams – part of Countrywide – was taken to court by Wrexham Trading Standards in Wales.
Magistrates found the firm guilty of failing to inform a purchaser about the mineshaft despite being aware other potential buyers had withdrawn from purchasing the semi because of it.
Beresford Adams was ordered to pay a £3,500 fine, £5,000 costs and to pay the complainant compensation of £515, representing the cost of searches and surveys incurred which would never have been commissioned had the information about the mineshaft been disclosed.
Countrywide subsequently announced it would be appealing against the decision.
At the appeal, Matthew McNiff, for Beresford Adams, said Wrexham Council had not submitted any evidence to show any person had been ‘knowingly’ involved. Trading Standards had gathered documentary evidence from files but had not approached or spoken to the branch manager.
Judge Dafydd Hughes said: “Had the investigation involved the manager, evidence may have emerged.”
After the case, Cllr David Griffiths of Wrexham Council, said: “This is a disappointing result for the council but it is important to note although this case has been overturned, it was lost on a technicality.”
A spokesperson for Beresford Adams said: “We note the court’s decision and have nothing further to add on the specific case.”
In guidance from the Office of Fair Trading, agents must not leave out important information. The guidance warns that breaches could lead to criminal enforcement action, unlimited fines and up to two years in prison.
Even if agents are not aware of a particular drawback or material feature, but should have been and fail to disclose it, then the agent could also be culpable.
The first link is how we reported the case last autumn. The second link is to the OFT guidance.
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Comments
I am not sure this sets any precedent and it is impossible to know without reading the judgement.
On the face of it I cannot see why an offence would not have been committed. You do not need 'knowledge' to commit an offence - you can do so by being negligent
What appears to have happened is that they TS dept did not investigate or talk to everyone it could have - which is why this particular case was thrown out.
If there is negative information which is considered 'material information' that the buyer needs to make an informed decision then you need to disclose it.
Bring pack HIPs. The existence of the mineshaft would have been revealed by the right person at the right time.
Does anyone actually know an agent who complies with the regs?
@ Lee Russell
When Lee have you ever listened to your bosses!!!
That being said, we totally agree with you about contacting the local authority, never is that a good idea.
Love Ribena Girl and Yappman
Hi Hawkeye,
Taken your point but I am like a dog with a bone when something gets me. I actually spoke to a top dog at oft this morning and it was obvious to me that they hadn't thought of this scenario nor been asked this question.
He even said he experienced the need for an indemnity insurance on a house he purchased. I also told him that a local sols whose opinion I sought was aghast at the idea of what we were being recommended to do and said they advice the vendor NOT to call the authority!
He is seeking opinion from his legal team on my point so hopefully I will get a clear cut answer. However the bottom line is I won't be calling the council regardless of what the bosses say.
So once again flagrant waste of tax payers money by the council! What a shame Wrexham Council aren't made to account for this in these times of austerity when every penny counts?
How far away is very close to the property? the depth of the shaft away or closer, how deep was/is the shaft and was the shaft filled in as it is described as an old shaft?
@Kevin Hand I agree with your logic. The vendor should have revealed all the information to the agent and if I had been said agent I would have perhaps refused instructions but that would have been determined by answers to my questions above.
@Lee Russell - all you will ever get from those organisations is waffle as they are too frighhtened to give an opinion. This is typical of all such groups of dim wits. NAEA is the same when faced with a complaint and so is the Advertising Standards. Cut your losses and move on.
It would seem there was no "defect" that directly affected the property, although the mineshaft may have been a problem for some it may not be for others. In my view once the precence of a shaft was brought to the attention of the agent they should just include it in the details - but no further comment is necessary.
If Trading Standards are too crap to do their job, doesn't that invalidate any OFT rules?
I am confused. The headline says the Judge ruled no misleading and the article says there was and the agent was fined.
As soon as the agent was aware of the problem effecting the sales he should have gone back to the owner and reduced the price to one which reflects the desirability of the property with the defect.
Some onus should be on the owners here, though. Knowing about a defect and not revealing it to the agent should be caution-able.
If a defect is not obvious but not disclosed to the agent, then it is unreasonable to ask the agent to spend large amounts of time and money doing searches prior to marketing a property.
That is why there are solicitors involved in the sales process!
Pleased they won whether a technicality or not.
I went on an internal training course recently and we were advised that if there is a doubt whether someone has planning permission or building regs, we should enquire to the local authority. I objected stating that we could invalidate our vendors chances of indemnity insurance. Despite this and my concern that we could end up sued by a vendor for our actions, they still insisted this was the right approach.
I am trying to get this point specifically answered by oft as to whether this goes beyond our role but getting a non waffly answer is proving difficult.
going down the ole coal hole!