Property owners who are finally cleaning up after flooding and dealing with their insurance claims are being reminded that they will have to re-live the experience when they come to sell.
Said commercial property expert Silke Buschmann of Grant Saw Solicitors: “Anyone buying or selling needs to be careful about investigations and responses when it comes to flooding. Although the general principle is ‘buyer beware’, where aproperty owner tries any cover up when answering questions in the pre-contract stage, there may be a case for compensation if it”s found that the answers were untrue or fraudulent.”
Most property transactions use the Law Society’s pre-contract property information form to collect information from a seller, which nowadays includes specific questions about whether any part of the property has ever been flooded. Where any flooding is reported, the seller has to explain what caused it, such as ground water or a river breaching its banks.
And sellers who have given false answers to pre-contract questions have found themselves facing the consequences. In a case that went to the High Court in 1983, Jones v Emerton-Court, the seller of a house in Devon said there had never been any flooding to the property, but when this was proved to be untrue, the court awarded the buyer damages to cover a reduced value for the property as well as compensation for inconvenience.
Others involved along the purchase route may also have a responsibility to a buyer. Where a surveyor has been asked to undertake a full building survey, they could be potentially liable if they reasonably could have identified any potential for flooding at the property. Similarly, the conveyancing process should include relevant searches and additional pre contract questions if an area is known to be subject to flooding, and the buyer should be kept informed about the risk.
She added: “Even in today’s buoyant markets, sellers sometimes imagine any negative information such as previous flooding will put the buyer off, but it’s really not worth the risk to fudge your answers, it’s just opening the floodgate for an even more serious danger – this time the courts and claims for compensation.”
This is not legal advice; it is intended to provide information of general interest about current legal issues.