Bought a House with Problems Not Disclosed UK? Here’s What You Can Do

Buying a house is often the most significant financial commitment a person can make. However, what happens if potential buyers discover problems with the property that weren’t disclosed during the purchase? For many UK homebuyers, this is a nightmare scenario that can lead to unexpected costs, stress, and even legal disputes. Unfortunately, undisclosed issues—whether they are structural problems, boundary disputes, or legal complications—are not uncommon.

In this guide, we’ll cover what legal obligations sellers have to disclose property problems, how estate agents fit into the picture, and what you can do if you’ve bought a house with hidden issues. Understanding your rights as a buyer and the legal framework surrounding property sales is essential for addressing these problems and seeking the right course of action.

Understanding a Seller’s Legal Responsibility to Disclose Problems

In the UK, a seller’s legal responsibility includes disclosing certain issues that can affect the property’s value and the buyer’s experience. While buyers often focus on surveys and searches, sellers have significant legal obligations before contracts are exchanged.

Physical and Legal Issues Sellers Must Disclose

Sellers must inform buyers of any physical or legal problems, such as:

• Physical issues: Structural defects, damp, subsidence, faulty electrics.
• Legal issues: Boundary disputes, planning permissions, rights of way, or listed building restrictions.

Failure to disclose these could lead to legal action if the buyer uncovers the issues after purchase.

Consequences of Non-Disclosure

Non-disclosure can result in legal claims, with buyers seeking compensation for repairs or even rescinding the sale entirely. To avoid this, sellers are encouraged to be transparent.

Seller’s Property Information Form (TA6)

The TA6 form is a crucial document in the transaction, detailing any disputes, environmental risks, or legal complications. Sellers must complete this form accurately, as omitting or misleading information can have legal consequences if problems arise later.

Consumer Protection from Unfair Trading Regulations 2008

These regulations require sellers to provide truthful and complete information, prohibiting misleading actions or omissions. Failure to disclose important details, like flooding or neighbour disputes, can result in legal action. Estate agents are also bound by these rules and may be held accountable for concealing information.

The Role of Estate Agents in Disclosing Problems

Estate agents are key players in property transactions, acting as the link between buyers and sellers. In the UK, they have a legal obligation to disclose any material information about a property that could affect a buyer’s decision.

Responsibilities of Estate Agents

Estate agents must disclose any known issues, whether they are physical defects like damp or subsidence, or legal concerns like boundary disputes or lack of planning permissions. This isn’t just good practice—it’s a legal requirement. Buyers often rely on agents for accurate information, so agents must provide truthful and complete details about the property. Failure to do so could lead to legal consequences.

Answering Buyer Enquiries

Buyers or their solicitors typically raise questions about the property during the transaction. Estate agents are legally obliged to answer these queries honestly. Whether the buyer is asking about past flooding, structural problems, or planning permissions, agents must give accurate and complete responses. Withholding or misleading information can have serious consequences for both the buyer and the agent.

Accountability for Undisclosed Problems

Estate agents can be held liable if they fail to disclose known issues. If a buyer later discovers a problem the agent was aware of, such as subsidence, the buyer may seek legal redress. Agents could face claims for compensation and sanctions from regulatory bodies for failing to meet their obligations.

Compliance with Consumer Protection Regulations

Estate agents must comply with the Consumer Protection from Unfair Trading Regulations 2008, which prohibit misleading or incomplete information about a property. This applies to both written property listings and verbal statements made during viewings. Breaching these regulations can result in fines, legal action, or disciplinary measures from industry regulators.

What to Do If You Suspect Undisclosed Problems

Discovering hidden issues with a property after purchasing can be frustrating and costly. Whether it’s structural defects or undisclosed legal disputes, there are steps you can take to address these problems and protect your investment.

Seek Legal Advice from a Property Solicitor

If you suspect the seller didn’t disclose important information, the first step is to consult a property solicitor. A solicitor can review your case, including key documents like the property information form (TA6) and the sales contract. They’ll advise you on whether you have grounds for a claim, such as misrepresentation, and guide you on how to seek compensation or, in severe cases, cancel the sale.

Hire a Professional to Conduct a Building Survey

If there are physical issues like structural problems, damp, or faulty electrics, hiring a surveyor for a building survey can uncover hidden defects. A full structural survey is particularly helpful in identifying major issues. If the survey reveals problems that the seller didn’t disclose, this report can support a claim for compensation.

Request a Copy of the Property Information Form (TA6)

If you don’t already have it, request the TA6 form from the seller or estate agent. This form details any known issues, such as disputes or building work. Reviewing this with your solicitor helps determine whether the seller failed to disclose key information, potentially giving you grounds for legal action.

Ask the Seller or Estate Agent About Known Issues

Directly asking the seller or estate agent about any known problems is another important step. Ensure all responses are documented in writing to create a clear record. If issues were overlooked, this step may help resolve them, but if there’s evidence of non-disclosure, it strengthens your position for a formal claim.

Consequences of Non-Disclosure

When a seller fails to disclose known issues with a property, it can lead to serious legal and financial consequences. UK law mandates transparency in property transactions, and non-disclosure—whether involving physical defects or legal disputes—can result in several negative outcomes for the seller and provide potential remedies for the buyer.

Legal Action Against the Seller

If a seller knowingly withholds important information, such as structural issues or boundary disputes, the buyer may take legal action for misrepresentation. The seller could be held responsible for misleading the buyer about the property’s condition or legal status. This can lead to the court ordering the seller to compensate the buyer for financial losses or to cover the cost of necessary repairs. Legal action typically begins with the buyer consulting a property solicitor to assess the case.

Compensation for Losses

Buyers may seek compensation for financial losses caused by undisclosed issues, such as structural repairs, legal disputes, or the reduction in the property’s value. For instance, if a buyer faces unexpected costs for repairing damp or a faulty roof, they may claim compensation to cover these expenses. A solicitor can help calculate the damages and pursue the claim through negotiation or litigation.

Seller’s Liability for Repair Costs

In some cases, the court may hold the seller directly responsible for covering repair costs. If it’s proven that the seller acted dishonestly or withheld critical information, they could be ordered to pay for fixing the issues, whether it’s minor work like plumbing repairs or major structural fixes. This can place a heavy financial burden on the seller if the defects are significant.

Rescinding the Contract and Refund

In severe cases of misrepresentation or fraud, the buyer may seek to rescind the contract. Rescission effectively cancels the sale, with the buyer returning the property and the seller refunding the buyer’s deposit. Though rare, this remedy is applied when non-disclosure significantly affects the property’s condition, such as if it’s deemed uninhabitable due to undisclosed structural issues.

How to Protect Yourself as a Buyer

Buying a home is a major investment, so it’s essential to take steps to protect yourself from any undisclosed issues. By being thorough and proactive, you can make informed decisions and avoid costly surprises down the line. Here’s what every buyer should do to safeguard themselves during the process.

Conduct a Thorough Inspection and Search

Before making an offer, it’s important to inspect the property carefully. Additionally, ensure that the property has a valid Energy Performance Certificate (EPC), as this impacts mortgage eligibility and potential tax benefits. Look for visible signs of issues, such as cracks, damp patches, or uneven floors, which could indicate structural problems. Beyond the physical inspection, your solicitor should carry out necessary searches, like land registry checks and local authority searches. These can uncover hidden issues such as boundary disputes, planning permissions, or environmental risks like flood zones, helping you avoid unexpected legal or financial problems.

Hire a Surveyor to Conduct a Building Survey

For added peace of mind, especially with older or renovated properties, consider hiring a professional surveyor. A survey can reveal hidden defects, from subsidence to roofing issues, that might not be apparent in a casual viewing. There are different types of surveys available—choose a homebuyer report for newer properties or a full structural survey for older homes. With the survey results in hand, you can decide whether to negotiate repairs or adjust the price accordingly.

Request the Property Information Form (TA6)

The TA6 form is filled out by the seller and discloses any known issues with the property, such as neighbour disputes, past repairs, or flooding. It’s essential to review this document carefully, but remember that it only reflects issues the seller is aware of. To get a complete picture, combine the TA6 with a building survey and solicitor searches to avoid any surprises later on.

Ask Specific Questions About Known Issues

Ask the seller or estate agent directly about any potential problems with the property. While estate agents are required to disclose important facts, asking targeted questions can reveal issues they might not have mentioned. Questions like, “Has the property ever had damp or subsidence?” or “Are there any unresolved disputes with neighbours?” can provide valuable insights. Documenting these conversations can also protect you if any issues arise after the sale.

Seek Legal Advice Before Exchanging Contracts

Always consult a property solicitor before exchanging contracts. Your solicitor will review the documents, including the TA6 form and search results, ensuring all legal matters are addressed. They’ll also negotiate any unresolved issues, such as necessary repairs or unclear contract terms, before you’re legally bound. Exchanging contracts is a final step, so it’s vital to be certain that all concerns have been resolved.

Complete the Property Information Form (TA6) Honestly and Accurately

The Property Information Form (TA6) is a crucial part of the home-selling process, requiring sellers to disclose important details about the property’s condition. This includes past building work, disputes, and any known hazards.

Filling out this form honestly and accurately is essential. Failing to disclose key information, even unintentionally, can lead to legal trouble under the Misrepresentation Act 1967. For example, if you omit details about a boundary dispute and the buyer later finds out, they could sue for misrepresentation.

Honesty in the TA6 form ensures a smoother sale process, as the buyer’s solicitor will check for inconsistencies. Being upfront helps avoid delays or legal complications down the line.

Possible Outcomes When You Take a Seller to Court

When undisclosed issues with a property come to light after purchase, legal action may be the only route to compensation or resolution. The outcome of taking a seller to court depends on various factors, including the specifics of the case, the evidence provided, and the court’s interpretation of the law. Below are the key outcomes buyers might expect when pursuing legal action against a seller for non-disclosure.

Seller Ordered to Pay Damages for Losses

One of the most common outcomes is that the court orders the seller to pay damages to the buyer. Damages are financial compensation for losses directly tied to the seller’s failure to disclose problems with the property. These losses could include repair costs, diminished property value, or legal fees incurred by the buyer.

For example, if the buyer discovers a serious issue, such as subsidence or severe damp, that was not revealed before the sale, the court may award damages to cover the cost of fixing these problems. To secure compensation, the buyer must present clear evidence, such as expert reports or contractor estimates, to justify the amount of financial loss.

Contract Rescission and Refund of the Deposit

In more severe cases of misrepresentation, the court may order the rescission of the contract. Rescission cancels the sale, returning both parties to their pre-contract positions, as though the transaction never took place. The seller would then be required to refund the buyer’s deposit and any other money exchanged during the sale, while the buyer would return the property.

Rescission is typically applied when the undisclosed problems are so severe that they significantly alter the nature of the property. For example, if the property is found to be uninhabitable due to extensive structural damage or hidden legal issues like unresolved planning disputes, the buyer may argue they would never have made the purchase had they known. While rescission can allow buyers to escape a problematic property, it can be a complex process, particularly if the buyer has already made significant investments in the home.

Seller Ordered to Cover Repair Costs

Another potential outcome is that the court may order the seller to pay for the costs associated with repairing or resolving the undisclosed issues. This is common when the problems are serious but not extreme enough to warrant rescission of the contract.

For instance, if the property has undisclosed issues like a leaky roof, faulty wiring, or drainage problems, the court may require the seller to cover the cost of repairs. The buyer will need to provide estimates or invoices to prove the cost of fixing these issues. In some cases, this compensation may also cover legal disputes, such as boundary issues or unresolved building certificates, where the seller bears responsibility for resolution.

Case Dismissal if the Seller Did Not Knowingly Withhold Information

Not every case results in a win for the buyer. The court may dismiss the case if the seller can prove they did not knowingly withhold information or were unaware of the problem at the time of sale. The seller is only required to disclose issues they are aware of, and they cannot be held liable for problems they genuinely did not know about.

For example, if a seller was unaware of an underground drainage issue or hidden asbestos that emerged after the sale, they could argue successfully that they had no knowledge of the defect. In such cases, the court would likely dismiss the claim, as the buyer would struggle to prove intentional misrepresentation or negligence.

Proving the Seller’s Knowledge of the Problem

In any legal action based on misrepresentation, proving that the seller knew about the undisclosed problem is critical. Without clear evidence that the seller was aware of the issue and failed to disclose it, the buyer may face difficulties winning their case. It’s essential to provide documents, correspondence, or expert testimony that shows the seller’s knowledge or negligence.

The Misrepresentation Act 1967

The Misrepresentation Act 1967 is a vital piece of legislation designed to protect buyers who have been misled during a property transaction. It offers clear legal remedies for those who suffer financial losses due to misrepresentation, whether the information provided was intentionally deceptive or given by mistake. Here’s how the Act comes into play when buying or selling property.

Protection for Buyers Against False or Inaccurate Information

Under the Misrepresentation Act, buyers have a legal avenue to seek compensation if they’ve been misled by false or inaccurate information from the seller, estate agent, or surveyor. Misrepresentation can take many forms, from outright falsehoods about the property’s condition to subtle omissions, such as failing to mention ongoing boundary disputes or hidden structural problems.

Crucially, the Act doesn’t require the seller or estate agent to have knowingly deceived the buyer. Even if a false statement was made without intent to mislead, they can still be held liable. This is especially important in property deals, where buyers rely heavily on the accuracy of the information they’re given to make such a significant financial commitment. Whether the misrepresentation was fraudulent, negligent, or innocent, the buyer may still have a right to claim under the Act.

Compensation for Losses Incurred Due to Misrepresentation

If a buyer can prove that they were misled by false information, the Misrepresentation Act allows them to claim compensation for any financial losses they’ve incurred. These losses might include the cost of repairing undisclosed defects, the reduced value of a property due to legal or structural issues, or expenses tied to resolving problems that weren’t revealed during the sale.

For example, if a seller failed to disclose unresolved planning permission issues, and the buyer later faces expensive legal battles or has to cover costly fixes, they could seek damages to recover those costs. Likewise, if the seller or estate agent exaggerated or misrepresented the property’s condition, the buyer could claim compensation to cover necessary repairs.

Application to Both Physical and Legal Issues

The Misrepresentation Act 1967 covers not only physical defects but also legal problems related to the property. Physical issues might include things like undisclosed structural damage, a leaking roof, or faulty wiring. On the legal side, problems could involve boundary disputes, unresolved planning permissions, or other legal matters that were not properly disclosed by the seller.

In either case, the key point is that the buyer can demonstrate that they were misled or not given the full picture at the time of sale. If that leads to financial harm, the buyer is entitled to seek legal recourse under the Act.

Seeking Legal Advice

If you suspect there are undisclosed issues with a property, it’s critical to consult a property solicitor as soon as possible. A solicitor can provide invaluable guidance, helping you navigate the complexities of property law and protecting your rights as a buyer or seller. They will ensure you’re informed about your legal options and the steps necessary to resolve any problems.

What to Expect from a Property Solicitor

A property solicitor is your guide through the legal maze of buying or selling a home. They’ll review essential documents like the property information form (TA6) to spot potential red flags and help you understand any issues that might affect the transaction. Beyond paperwork, they’re equipped to represent you in disputes, ensuring you’re protected at every stage of the process, even in court if needed.

How to Choose a Reputable Estate Agent

When selecting an estate agent, it’s essential to do your homework. Start by researching their reputation—read reviews and testimonials from past clients. Check if they’re affiliated with professional bodies like the National Association of Estate Agents (NAEA), a sign of credibility. Don’t hesitate to ask about their qualifications, experience, and the specific services they offer. Understanding their fee structure upfront can also help you avoid surprises down the line.

The Importance of a Property Survey

A property survey can be a deal-saver. By uncovering hidden issues, from structural damage to subsidence risks, a surveyor provides an in-depth report on the condition of the home. This can give you leverage in negotiating a better price or requesting necessary repairs. Ultimately, a thorough survey offers peace of mind, ensuring that you’re not blindsided by costly problems after the sale.

What to Do If You’re a Victim of Misrepresentation

If you’ve fallen victim to property misrepresentation, time is of the essence. First, seek advice from a property solicitor, who will guide you through your legal rights. Gather as much evidence as possible—this could include emails, contracts, and witness statements. In some cases, you may have grounds to file a professional negligence claim against the estate agent or even the solicitor. Depending on the impact of the misrepresentation, you could seek compensation for financial losses incurred.

Resolving Disputes Over Undisclosed Problems

Disputes over undisclosed problems can quickly become stressful, but your first step should be to attempt a resolution directly with the seller or estate agent. If this fails, it’s time to consult your property solicitor, who can suggest mediation or arbitration as potential avenues. Should the dispute escalate, be prepared to take the matter to court, where legal representation will be crucial.

The Role of the Property Information Form (TA6)

The property information form (TA6) is a pivotal document in any property transaction. It’s designed to disclose any known issues with the property, from disputes with neighbors to structural defects. Sellers are legally required to complete this form truthfully, and any misrepresentation could lead to serious legal consequences. For buyers, this form is a key safeguard, helping you avoid costly surprises after purchase and serving as an essential tool in preventing disputes.

Conclusion

Buying or selling a property can be complex and stressful. It’s crucial to understand the seller’s legal duty to disclose issues and the role of estate agents in this process. Always seek legal advice if you suspect undisclosed problems, and consider hiring a professional for a property survey. Finally, carefully review the property information form (TA6) before exchanging contracts to ensure all important details are covered.