Price agreed but facts not disclosed by vendor, can I ask for money off now?

[OhWesternWind]

I got a good price on a house which needs quite a lot of work doing, and the vendors accepted this on the understanding that they would not take any more off if there were problems arising from the survey etc. This is two brothers selling the property that was their parents'. They probably grew up in this property and live in the same town so would be well aware of the problems below.

There are three main issues that have come up today from my solicitor.

a The vendors have now disclosed that the brook at the bottom of the garden has flooded into the garden whereas previously they said there was no history of flooding

b My solicitor has found out that the property is leasehold whereas the vendors declared it to be freehold and

c There is an extension on the rear which is clearly an extension and was identified as such by the survey which they are denying is an extension, saying it is original to the house, and are therefore saying that there is no leaseholder consent for it.

I really feel that they are trying to pull the wool over my eyes on this one and feel quite upset. Would I be justified in asking for a price reduction on any/all of these issues? The leasehold is potentially a big issue if there are any restrictions on development or if I have to pay large fees to gain consent for development as there is quite a lot of work needs doing to bring thisi property up to scratch, and also I have some pet hens and I am worried I will not be able to keep them.

Any advice please?

I have spoken to my solicitor and all the houses in this area are leasehold to this same landowner so that is probably 400 houses. All the houses on my mum's estate in the same town are also leasehold so I think it is quite common in this area. The lease is 999 years starting in 1963 so I don't have a worry there. The solicitor has sent me through a copy of the lease and I need to have a good look through and then ask her any questions. Now I have seen the lease I am less worried. It is £24 per annum ground rent.

The flooding issue I am going to wait and see what my solicitor advises when she has finished her enquiries. There has never been a claim on the insurance and the buildigns and contents insurance are very reasonable (have already checked with current insurer).

I think we are in a "wait and see" situation. I still feel I have been misled but whether it is all the vendors or some the vendors and some the agent I am not sure. What a blooming mess though. I don't want to lose this house though . . .

You definitely need to pull out - but as a current vendor of a parent's house, I can see (to some extent) how this may have come about as until quite a late date in the procedure you are relying on other people's answers and if those people are not the people who actually bought the house and lived in it recently, they might not know (without making the effort to find out). No excuse for their negligence, but typical of the way the system works.

Yes I have spent about £1000 with solicitors and surveyors fees so far which I can't afford to lose

'Do you realise that the Council could demand the extension be pulled down, if it doesn't meet building regulations? Sounds like they don't have a building regs certificate, hence that lie. '

That depends on when the extension was built. An extension and alterations were done to my house in the 70s that I'm pretty sure wouldn't pass building regs today, and I'm not sure that planning permission was necessary then either. I don't worry about it, as the legislation isn't retrospective as far as I know.

I wouldn't worry about the extension.

If its been there more than 4 years it is unenforceable in terms of not having planning permission.

Planning permission and Building Regulations are two different things. I've had reason to look into the latter recently - I wasn't just saying that for effect. It is possible for a Council to take retrospective action - unlikely but possible.

It is common for small extensions or alterations to be carried out without involving building inspectors and getting a certificate, even where one should have been provided. The usual approach when selling is for the vendor to buy an insurance policy to cover the possibility that retrospective action might be taken. Because it isn't often, this isn't expensive.

Frankly, I'd be walking away.

If you're hell-bent on proceeding, I'd ask to see receipts for the flood banking works & to ascertain whether an insurer would cover buildings insurance.

How big is the garden? How far away is the stream? My friends have a stream at the end of their garden which sometimes floods (about once every 5 years) but it's barely an issue as they have one and a half acres and the stream is about forty feet from the house. There are floods and then there are 'floods'...

IMO - don't walk away..........run!!

There's something in the news today about flooding/insurance check that out first too

"I got a good price on a house which needs quite a lot of work doing, and the vendors accepted this on the understanding that they would not take any more off if there were problems arising from the survey etc".

So basically they have tried to con you into sticking with a price that you agreed when they were LYING. They were trying to con you!

You say you can't afford to lose £1000. But can you afford to lose all the thousands and thousands that it might cost you if there is flooding, or the extension was not properly built and falls down, or there are other things they are not disclosing that turn this house into a money pit?

I wouldn't even stop to ask whether you can ask for another price reduction. I would never ever enter into a contract with a liar.

Btw are you in NW england? 999 year leases are absolutely the norm here too and our ground rent is 89p per year.

You can find out yourself if the house is on the Enviroment Agency flood map, which would make it difficult to get flood insurance. Phone them up and they'll tell you who to contact. You can also get insurance to cover any costs if the leaseholder demands the extension is taken down, but get the vendors to pay for this. I would also be asking for a price reduction, stating the reasons very clearly, but be prepared to follow through and pull out of the sale.

Just to clarify what Skandi said about the Property Misdescriptions Act:

"Under the Property Misdescriptions Act you are entitled to be fully compensated for survey money and money spent on solicitors so far as the vendor and their agent have lied about the title. This act and the estate agency act both state estate agents must see title deeds prior to marketing."

This isn't strictly correct. The law requires that the Estate Agent use all due diligence - see point below:

What steps must be taken to verify information and what about genuine mistakes?
The Act provides a defence where the agent or developer can show that he took all reasonable steps and exercised all due diligence to avoid the commission of an offence. Where therefore an agent was able to satisfy a court that although a false statement had been made it was in spite of all reasonable steps having been taken and all due diligence having been exercised to avoid it occurring, he could avoid conviction.
There is no absolute obligation to check all information supplied to the agent by the vendor or others. But to avail himself of the "due diligence" defence where he relied upon information supplied to him by another person, an agent would need to satisfy the court that it was reasonable to do so, having regard in particular to the steps he took or might reasonably have taken to verify the information and whether he had any reason to disbelieve it.

When you take a property on to the market, the vendor has to fill out the contract which covers numerous things about the property and one of these is whether the property is freehold or leasehold. They have to sign and date this. They also have to sign a copy of the brochure/marketing literature produced by the EA - this constitutes acceptance that the information being marketed is correct.

This satisfies due diligence as the EA has no reason to disbelieve information about the tenure of a property that the vendor has written and signed. At the same time as this they have to verify information for the Money Laundering Act and obtain identification. All of this must be done before a property is marketed. If they did not get a signed contract, clearly showing this information, when they instructed the property you can seek financial recompense from the EA. Otherwise you need to pursue this from the vendor.

Another point is that you do not need to see the title deeds. In most cases these are not actually held by vendor but the mortgage company.

Sorry skandi, am not having a go here but the OP needs to be clear on the facts if she wanted to take action against the EA and/or vendor.

OP I would be dubious about this vendor but ultimately it depends how much you want the house. If you decide to proceed try and ensure that your solicitor is ultra thorough.

I agree with lilymaid's point about it possibly being negligence rather than deception - especially considering it was their parents house and not theirs.
But then I often try to believe the best in people and am sometimes proved wrong!

The leasehold aspect isn't really an issue as the lease is so long as to be effectively a freehold. Have bought houses like this and if you want you can buy the freehold pretty cheap as it has no real value - freehold purchase will seem expensive when compared to £24 pa though - but it's a psychological thing and will add value if you sell in future.
Wouldn't worry about the extension if it's been up a long time and is in good order. Perhaps the vendors are a bit dim and are saying the extension has always been a part of the house as long as they've known it.
On the flood aspect, if it's only ever flooded a part of the garden some distance from the house then probably not an issue - try and get a few 'anonymous' quotes from insurers and see if it affects the premium. If it's ever flood badly - it will probably have been reported in the local newspaper.
In the end, if the price is right, it just depends how much you want it.

I think what would worry me is what is yet to be discovered.

Whether a lie or just an oversight I 'd be concerned as to what else hadn't been disclosed or properly investigated and would find it hard to proceed with so little trust , and definitely not at the price agreed. A mortgage company won't place the same value on a leasehold as freehold and you need to go back to your surveyor with these facts and ask for a re-valuation, if you want to pursue this any further.

I think it depends on the extent to which you can afford to walk away, whether you have funds available to take on works, whether you think they're trying to make a fast buck and whether at the end of the day you'd be able to buy a similar house at a similar price.

I too don't think the title issue is a big issue - where we are in the NW I would say 90% of houses are leasehold. Nearly all new houses that are built (all over the country) are leasehold. If there are 900+ years left on the lease, not an issue. I certainly don't think it affects the value of the property.

Flooding - if I could get insurance, that wouldn't worry either.

Extension - would check with the local planning office - easy to do this through the Freedom of Information Act. You just send an email stating that its a Freedom of Information Act enquiry, whether the Property has planning permission / buildings reg for an extension. They'll review their planning records and revert to you - off the top of my head I think they have 14 days in which to reply. If it hasn't, then you need to ask whether it needed it in the first place and secondly, if it did, does it need it now and can you get it retrospectively? If not, then you look into insurance / speak to the Council about options.

If wouldn't make any decision about walking about yet. All of the above can be easily overcome.

Pull out fgs!

We bought a house from a vendor making the same stipulation about price, hence massive alarm bells. We understood it to be because they wanted a quick sale (they were also naive about the market and unwilling to accept value had dropped) but the other possibility was of course that they had something to hide that a survey might discover. This turned out to be the case - one big expensive thing and quite a lot of other things that we've discovered along the way.

Unfortunately our survey did not discover the big problem (costing us about £10k) and missed some obvious smaller ones (£1-2k each to a total of about £8k). This was a Buildings Survey (structural survey - top of the range and definitely what you need in a case like this) and we are currently taking action against the surveyor.

What kind of survey did you have? I think you'd be mad to go ahead without a Buildings Survey.

Can you afford the sort of extra costs we've paid, or much, much more, depending what other problems there might be? Would you still think the house was good value at the agreed price plus the possible, unpredictable, costs of repairs?

Our vendor had lied in a conveyancing document. I could have taken them to the small claims court for misdescription but decided it wasn't worth the hassle and there's no guarantee of payment even if the court found in our favour.

I'm currently taking a case against the Council to the local authority ombudsman, having been all the way through their own complaints procedure because, in our case, a building regs certificate had been issued for work that hadn't been inspected properly and never did meet BR standards - inspection deliberately prevented and worst bits hiden by devious vendor. This won't win us money and our complaint may well not be upheld but I feel the point needs to be made.

The surveyor is the person it is worth pursuing financially, as he is insured and regulated, so there's a mechanism for assessing competence and accessing payment. Estate Agents would be the same.

It's standard for your surveyor to flag up anything that would have required building regs (small works need this but often not planning permission) and for your solicitor to do the chasing with the council and ask for insurance if needed (and yes, this can be for work going back decades, though, if the work was ok as most is, enforcement action will never be taken, hence this insurance is cheap - but the vendor should pay it).

I hardly need say that all this has taken up a great deal of our time, as well as money. Are you prepared for that?

Re the extension; just to make you aware OP, if you do approach the council about this directly, and it is found to have no Buildings Regs certificate (and it turns out to have been required), alerting the council would mean that you then would not be able to opt for indemnity insurance. The insurance is, generally speaking, the quickest and easiest way to overcome lack of BR certificates etc - best leave it to your solicitors, rather than doing too much rooting around yourself, and inadvertently shooting yourself in the foot! Having got this far in, I would hazard a guess that the searches have now been carried out? If so, the local search will reveal any works that the council are aware of anyway.

Likewise, re the flood risk, an environmental search will also have been carried out by your solicitors, which will reveal if the property is in a flood risk area.

Please be guided by your solicitors - try not to speculate too much by what you are being told on forums! Some advice is sound, but likewise, some may end up complicating things further. You are paying for legal representation, so trust what you are told by them, and ask them for advice.

I would totally agree with the posters asking what kind of survey you had? Don't just settle for a mortgage valuation - this is NOT a full and thorough survey

If you are determined to proceed (and I'm with those thinking that it may end up being a money pit, and the vendors sound a bit dubious to say the least) the do so with extreme caution.

To tell you it's freehold when it is in fact leasehold, is a huge error on their part, and will affect any valuation, so your mortgage lender may have issues with that anyway. Has your mortgage offer been released yet? If so, is the property shown on there as freehold/leasehold? If freehold, your solicitors will be reporting to them that it is leasehold and will need their go-ahead to proceed further (as your solicitors will also be acting for your mortgage lender in protecting their security)

I would take stock and see what you now think the house is worth to you, if anything. Can you get insurance to cover the lack of building regs on the extension (my sister did on her house and passed the price of the policy onto the vendors). Are you happy witht eh flood risk - have you spoken to insurers about that? Flooding the garden may be fine, it may not - it depends on the size of the garden and the overall flood risk.

When I sold my last house I knew that there was damp in the basement, i told the purchaser there was damp in the basement. The house was 150 years old and all the houses in the street with basements had damp, or had been tanked. It had never bothered us, but we knew it was an issue, so we told the purchaser that this was the case, it would be picked up by the survey but we had factored that into the price. Despite this the vendor still sought to reduce the price because of the damp in the basement, saying they would have to take the kitcehn out to tank it. We agreed a reducation which I don't regret as I wanted to move, but thought it a cheek as the survey told them the same as what we had. If I hadn't told them however I would have felt very differently and I think that's what's happening in your case