Why is it that house buyers get little or no protection from consumer protection legislation?
Buy a washing machine or a tin of baked beans and the law gives you various rights and remedies if the goods turn out to be faulty – but this law does not help when you buy your home.
The government has recently announced a new Consumer Rights Bill, to strengthen and consolidate existing consumer rights laws.
But the poor (or even the rich) home-buyer seems to have few rights. Conveyancing Solicitors will point out that the basic rule when buying a property is ‘caveat emptor’ or ‘buyer – look out!’ – in other words the buyer must look out for himself, and cannot rely on any consumer protection.
If you buy goods that turn out to be faulty, there are many laws at present which provide various remedies. And on top of any legal remedies, manufacturers and retailers often give guarantees on their products.
Homes rarely come with any guarantee
Newly-built properties purchased from a builder may have some form of warranty, such as that provided by the NHBC. Such guarantees do offer buyers protection against some defects, and can be transferred to subsequent buyers. But most properties do not benefit from any such protection.
The problem for homebuyers is that consumer legislation mostly gives protection for consumers buying goods and services from traders – but homes are not legally classed as ‘goods’ and most homes are purchased directly from the private owner, who is not therefore a ‘trader. ’
So if you want to know about the condition of a house you are buying you will have to rely on having an expensive building survey carried out. The seller might know that the property is about to fall down, but doesn’t have to tell you.
And knowing about the physical condition of a property is only part of a buyer’s worries – there might be all sorts of other problems which could seriously affect your use and enjoyment of the property, but where do you stand if you only find out about them after the purchase has been completed?
You will probably appoint a Conveyancing Solicitor to handle the legal side of the transaction to ensure that you end up with a good title to the property. The Solicitor will make various searches with the local council and other authorities, and also ask the sellers to complete an information form about the property.
But sellers are not legally required to provide any such information, and even when they do there is often little that can be done if the replies are misleading or incorrect. What happens when you find out after completion that the sellers had an on-going row with the neighbours about a right-of-way, which they conveniently forgot to mention? What do you do when you find that the loft has been left full of junk, or the central heating system isn’t working?
In such circumstances you might have a claim for breach of contract or misdescription. But once a purchase has been completed, often the only remedy available to a buyer is to start a court case against the seller – that is, if you can find the seller. When the seller has emigrated there is little that can be done to pursue a claim.
Making a claim against a seller is an uncertain process that will not necessarily solve the problem. Even if successful, in most cases the courts will only make a monetary award, and the buyer will still be stuck with the property.
Is there a solution to the problem?
One simple answer would be to abolish the caveat emptor rule. That would certainly help, although buyers could still end up having to sue the seller for damages if they bought a home with hidden defects.
Home Information Packs (HIPs) were introduced in an attempt to speed up home buying. The intention was to provide buyers with full information about the property, which would have included a survey.
The requirement for a survey was dropped from the final scheme as introduced in England and Wales. So HIPs ended up as a bundle of legal information which most buyers ignored as they expected their Solicitors to deal with that side of things.
HIPs were certainly no guarantee either of the condition of the property or the seller’s legal title. They were unpopular with sellers, who had to pay for them, and not much help to buyers, so they were abolished.
However a similar scheme for Home Reports in Scotland did include a requirement for a survey. That scheme has been retained, so anyone buying a home in Scotland is perhaps in a rather better position than if buying in England or Wales.
Getting a proper survey and a good Conveyancing Solicitor is still important
While parliament is happy to change the law to give even greater rights to anyone buying goods and services, it seems that they are still not prepared to give homebuyers any sort of protection. So unless parliament changes the law homebuyers will still continue to make what for most people is the biggest purchase of their lives without the benefit of any guarantees.
So at present the best a buyer can do is to commission a full structural survey to ascertain the physical condition of the property, and appoint a competent Conveyancing Solicitor to thoroughly investigate the legal side of things.
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