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Buyers who paid £100k deposit sue vendors after withdrawing offer

The prospective buyers of a home in Oxfordshire who paid a deposit of £108,000 before withdrawing are suing the sellers in a dispute over a nearby development.

The dispute, which relates to a deal in 2017, throws up many issues at the centre of the industry’s current debate over reservation fees, up-front property details and non-refundable deposits.

The Daily Telegraph reports that the prospective buyers of a barn conversion priced at £1.08m - Adrian and Lisa Powell - are suing the sellers for £300,000.


The vendors - Philip and Elisabeth Ash - allegedly knew of plans for the nearby motel and diner but did not mention it in the seller’s questionnaire, when asked whether they knew of any proposal which might affect the home for sale. 

The sellers claim they did not believe the development would have a detrimental impact on the property they were selling. The motel is not visible from the barn itself - only from the paddock area, which is separated from their home by a few yards - and they believed the form they were filling in only applied to the house.

The legal case, at Central London County Court, has heard that it was only after contracts were exchanged that the Powells learned of the large-scale redevelopment of a former Little Chef nearby. At that point they withdrew from the purchase.

However, they claim that they had bought furniture and even a horse in preparation for moving: they want the return of their £108,000 deposit and payment for lost expenditure.

A barrister acting for the Powells says the Ashes made "false, misleading and/or inaccurate pre-contact statements" which entitled his clients to tear up the contract and be refunded their £108,000 deposit.

The Ashes, meanwhile, say that the Powells' 10 per cent deposit has been forfeited and that the prospective purchasers should bear the cost of purchases they made before the sale went through.

The case continues.

You can see the Telegraph story here, although for some readers it may be behind a paywall. 

  • Rob Hailstone

    If the usual Law Society questionnaire had been used (TA6), this is the question that would have been asked:

    Is the seller aware of any proposals to develop property or land nearby, or any proposals to make any alterations to buildings nearby? If yes, please give details.

    Doesn't seem relevant that the sellers claim they did not believe the development would have a DETRIMENTAL impact on the property.

  • icon

    Kerching for the lawyers as always.

  • Kristjan Byfield

    So they didn't do local searches prior to exchange? £192k on furniture & a horse- blimey that's some serious furniture and a huuuuuuuge horse!

  • Rob Hailstone

    Local searck on its own, wont reveal planning etc for nearby land.


    No, but a planning search would - available for about £40 with the environmental search.

  • Matthew Payne

    Another example of why the proposed rushed introduction of reservation agreements wont work in a practical sense which was nicely summarised in a Property Industry Eye article on 28 March. Relevant to this point why they won't work is due to a lack of full legal disclosure by vendors that makes them accountable. At best most vendors won't voluntarily highlight all the problems with their property, at worst, a good number deliberately conceal issues and hope they can get their sale over the line without a fall through or price reduction.

    I know 2 people near me currently with properties sold, one with a historic nasty boundary dispute with the neighbour, and the other with a big drainage issue. Neither matter disclosed to either buyer at the point of sale, and as it currently stands I havent seen anything that would protect either buyers reservation deposit in these cases when they decide to withdraw further down the line. If the MHCLG is genuinely only looking to stop people changing their minds as it is claimed, there needs to be complete transparency in place for that to happen. Too much smoke and mirrors as it stands that will only see far more cases in the Courts as people fight to recover these deposits.


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