This case concerns a dispute referred to The Property Ombudsman (TPO) scheme from a buyer. The complaint that the Ombudsman was asked to examine concerned the description of a property bought at auction.

The buyer claimed that the agent failed to disclose known changes to the property description and failed to update the sales particulars or issue an addendum. The property was advertised as having two bedrooms when in fact it had only one large bedroom.

The agency explained that they were unaware of the issues regarding the description of the property until the evening before the auction and sought to notify all potential bidders at the earliest opportunity. They said that an announcement was made from the rostrum prior to the auction as soon as they were aware of the anomaly.

Remote bidding is easy, but buyers have an obligation to carry out their own checks before the sale.

Having seen the sales particulars, which clearly noted the property as having two bedrooms, the buyer registered his interest in bidding on the property and completed and signed the required documents. These documents consisted of an authority form to bid on behalf of a non-attending bidder and a signed copy of the agent’s terms and conditions to bid by telephone/letter. The buyer explained that the guide price for the property was circa £20,000, which he considered to be low as the normal price of two bedroom terraced properties in that area was upwards of £40,000.

INVESTIGATION

Under Paragraph 7i of the TPO Code of Practice, agents must by law comply with the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CPRs requires agents to ensure that all statements made about a property are accurate and are not misleading.

The Ombudsman took this into consideration when reviewing this complaint, and noted the following:

The agent wasn’t contacted by the seller until the night before the auction in relation to the description of the property. There was no evidence that the agent was aware of the mis-description prior to that date. They had therefore marketed the property in good faith based on the inaccurate description the seller had given them.

At the start of the auction the agent announced that they believed the property had one large bedroom rather than two bedrooms. They also reminded all attending the auction that they were bidding based on their own inspections. A copy of the transcript of this part of the auction was provided to the Ombudsman by both parties and had not been disputed.

A representative of the agent had telephoned the buyer prior to the commencement of the sale of the property.

While an announcement had been made from the rostrum regarding the mistake in the description of the property, it’s unrealistic to expect the complainant to have necessarily heard it. Rather, in the case of a telephone bid, it was considered to be the role of the representative of the agent who was speaking with the buyer to make sure that he was fully aware that the property had one bedroom not two.

OUTCOME

The Ombudsman found that the agency had failed in its obligation to treat the buyer fairly and as a result he had experienced avoidable aggravation, distress and inconvenience when he realised, after the auction where he had been successful in his bid, that he had purchased a one bedroom property rather than the two bedroom property he was expecting.

The Ombudsman did not consider it appropriate to make any judgement or award with regard to the cost of the property or the potential difference in price for a one bedroom compared with a two bedroom. The buyer had an obligation to ensure that he carried out his own investigations to establish that the property was as described and fit for purpose. This was explained to him within the agent’s terms and conditions. In addition, by the buyer’s own admissions, he considered the guide price to be at least £20,000 less than the usual sale price of a two bedroom property in that locality and it was expected that he would have raised some concerns.

This complaint was supported and a compensatory award was made of £750.