Conveyancing & Caveat Emptor

Image of model house on a hand with keys

In his latest blog, Trainee Solicitor Michael Radze-Constable discusses the history of the phrase ‘Caveat Emptor’ or ‘Seller Beware’…

‘Caveat Emptor’ is a Latin phrase which has governed the buying and selling of goods since 1603, after an Elizabethan gentleman was left rather disappointed, having departed with the grand sum of one hundred Great British Pounds to purchase a bezoar stone which supposedly possessed unique healing properties… he later realised the stone he purchased was just that… a normal stone! https://www.timms-law.com/conveyancing-blog-buyer-beware-principle-does-it-affect-my-mortgage/ The phrase, which translates as “let the buyer beware”, dictates that it is the buyer’s duty to identify any potential defects or problems associated with property before they purchase it.

How History Has Affected Consumer Rights

However, English law is slowly but gradually adapting. The 2015 Consumer Rights Act has enhanced consumer power, by providing greater leeway to return faulty goods, and in terms of property transactions, SPS Groundworks & Building Ltd v Mahil [2022] has brought to prominence Caveat Emptors long lost twin – “Caveat Venditor” or “Seller Beware”.

The case concerns a property sold by SPS to Mrs Mahil. The property was alluringly described as possessing “extra scope for development”, however, the accompanying auction brochure failed to expressly state that the property was subject to overage provisions (where a sum of money, usually a percentage of the increase in value, is payable to another party if the land is developed). It was only the legal pack, containing the nitty gritty detail, which revealed the requirement of a 50% payment for any increase in value if the land was developed. Despite this being available for download both prior to and at the auction, Mrs Mahill did not view the legal pack. She did however, successfully bid for the property, and only became aware of the overage after exchange of contracts.

Mrs Mahill, put off by the idea of paying large sums to a corporate body who no longer owns her soon to be land, refused to proceed to completion of the matter (which takes place after contracts have been exchanged). SPS, demanding that she indeed complete, issued proceedings.

Delivering his judgement at the Birmingham High Court, His Honour Judge Murdoch departed from traditional black letter law, and instead considered what was equitable (a legal term which denotes fairness and justice) stating that if a seller is aware of a defect, it is their responsibility to provide “full, frank and fair information” to potential buyers, or at the very least provide a “fair and proper opportunity” to identify any defects. Given that SPS had failed to expressly disclose any defects, Mrs Mahill was entitled to assume there were none present.

So, has the 2015 Consumer Rights Act sparked a Jekyll and Hyde style transformation in English property law? We must err on the side of caution. SPS v Mahill specifically concerned auctions, however, Judge Murdoch did emphasise that if a lawyer/conveyancer is instructed to sell a property, the onus is on them to carry out a full and thorough investigation of the title deeds, and alert their client (in addition to potential buyers) of any defects to the title.

How We Can Help

At Timms Solicitors, we always obtain up to date copies of the title you are selling and will bring any defects to your attention at the earliest opportunity. We will offer you clear advice and guidance on what can be done to remedy any defects identified in order to help the sale of the property proceed to completion.

For further information, please contact the conveyancing team on freephone 0800 011 6666 or via email at legal@timms-law.com