Under section 1 of the Misrepresentation Act 1967, where a seller of property makes a representation to a purchaser which is false, and the seller relies upon the representation in entering into the contract and suffers loss as a result, the seller is liable for that loss unless it establishes it believed and had grounds to believe the facts represented were true.
In Eryl Rosser v Pacifico Ltd [2023] EWHC 1018 (Ch) the claimant purchaser succeeded in a claim for damages for misrepresentation under section 1 of the 1967 Act.
The case concerned a property sold with the benefit of two bedrooms on the second floor, where the only light source to the front bedroom was a Velux rooflight window. The claimant acquired the flat in Cardiff in July 2016 for £300,000. In October 2017, the local authority required her to remove the Velux window, which was unauthorised, under threat of enforcement action.
The court accepted it was represented to the claimant through e-mails from the seller’s agent and plans of the property appended to the lease and draft contract that the front room on the second floor was capable of being used as a bedroom. It also accepted the seller’s statement in the Law Society property information form, that it was not aware of any breaches of planning permission conditions or of any work which did not have all necessary consents was a representation it believed or had reasonable grounds to believe that was the case.
Both representations were false. There was no planning permission for the Velux window. Its removal left the front bedroom without any natural source of light or ventilation and unsuitable for use as a bedroom. As for the second representation, it was not alleged the seller knew the relevant planning consent had not been obtained but it had not made the appropriate enquiries and did not have reasonable grounds for believing planning permission had been obtained for the window before responding to the PIF.
The court accepted the claimant’s evidence that she had relied on the representations made and would not have proceeded with the purchase if she had known the window had been installed illegally. The claimant was awarded damages of £34,143 being the difference between the value of the property in 2016 and the price paid and other expenses.
Louise Clark is a property law consultant and mediator
