Commercial Property Enquiries

When property is sold most Buyers raise enquiries with the Seller. Preparing responses to these enquiries can prove time consuming and frustrating for any Seller. Giving misleading or careless responses, ‘glossing over’ the full truth or failing to update responses before exchange/completion of contract can result in ‘Disaster’ for the Buyer and the Seller.

Disaster in this case means:

1. There may be a material difference in the value or description of the property
2. The Buyer may terminate the contract, demand the return of any deposit paid and seek damages from the Seller

Recent Case

The recent case of Greenridge Luton One Ltd v Kempton Investments Limited [2016] EWHC91 reminds all of us that replies given by a Seller to such enquiries must be accurate – accurate when given and accurate when contracts are exchanged.

In this case the High Court held that the Buyer was entitled to end the sale agreement, re-claim its deposit of £812,500 and receive damages for deceit.

Damages of £395,948 were awarded to the Buyer in respect of the wasted costs of the purchase.

Solution

On selling a property it is crucial for Sellers to:

1. Take time to provide accurate answers to enquiries, so that all information which should be shared is shared
2. Provide the Buyer with an update of any change in circumstances which will affect the accuracy of the answers already given
3. When asked for any further information, documentation or clarification by the Buyer, to comply with such request

Leases

Many leases also involve the use of enquiries. Landlords as well as Sellers must ensure that responses to enquiries are accurate and updated to always give a full and accurate picture.

If you are intending to buy, sell or lease a property and would like assistance please contact our Commercial Property team.