Selling retirement property

This case concerns a dispute referred to The Property Ombudsman (TPO) from a potential buyer concerned that the agent failed to advise him that all potential buyers of the property were required to attend an ‘interview of suitability’ before being allowed to purchase the property. The property was located within a care home village and that the management of the care home site required such an interview.

The buyer said that he withdrew from the transaction due to a clause within the lease which he found unacceptable, one that provided that should the lessor have reasonable grounds for believing
the property to be no longer suitable accommodation for the lessee in view of the lessee’s health then, following consultation, the lessor would make recommendations as to alternative accommodation which would be acted upon by the lessee. However, he believed that had the agent informed him that an initial interview of suitability was required, he would have attended such an interview at an early stage and the clause in the lease would have been brought to his attention before he incurred costs.

The question was, should the agent have been ‘on notice’ that a suitability interview was required.

The Ombudsman noted that this was a probate sale and the buyer arranged to view the property and made an offer to purchase directly with the beneficiary of the estate, not the agent. The first time that the agent was aware of the buyer’s interest in the property was after the beneficiary of the estate contacted them to say that she had accepted the buyer’s offer.

THE AGENT’S ROLE

The agent explained that they were unaware that potential buyers had to attend an interview of suitability or, indeed, that the clause within the lease existed. TPO’s role was to determine whether the agent was at fault by omitting to provide the buyer with information which could have made him aware of both the ‘interview of suitability’ and the unacceptable clause within the lease at an earlier stage (and, therefore, could have prevented him from unnecessarily incurring transaction costs).

When marketing a property for sale, by law and under Paragraph 7i of the TPO Code of Practice, agents have an obligation to comply with the Consumer Protection from Unfair Trading regulations 2008 (CPRs). The CPRs require an estate agent to disclose any material information of which they are aware in relation to a property in a clear, intelligible and timely fashion. Agents also have a duty not to mislead consumers by failing to give them the information they need to make an informed decision, where this causes or is likely to cause the average consumer to take a different ‘transactional’ decision.

Before marketing commenced, the agent would have been expected to request information from the executor (or beneficiary) of the estate in order to ensure that all statements they made about the property (both to prospective purchasers and within the sales particulars) were accurate and not misleading. From the evidence presented, the Ombudsman was satisfied that the agent had acted in accordance with their obligations as they undertook a market appraisal and confirmed with the executor and beneficiary of the estate that the sales particulars were accurate before marketing of the property commenced.

On the balance of the evidence presented, the Ombudsman was satisfied that the agent did not deliberately withhold information about the obligation to attend an interview. There was no evidence that the executor or the beneficiary of the estate disclosed the requirement for an interview before marketing commenced, and that the agent was unaware of the interview requirement until informed by the buyer.

WHO IS TO BLAME?

The question was whether the agent should have been ‘on notice’ that the care home village required potential buyers to attend an interview of suitability. The agent had not previously sold a property within the care home village and advised that they had not previously sold an age-restricted property which required potential buyers to attend an interview. In light of this, and on the balance of the evidence presented, it was decided that there weren’t any circumstances that should have put the agent on notice that potential buyers were required to attend an interview of suitability or that further investigation was required in that respect.

It was clear to the Ombudsman that the aggravation experienced by the buyer in withdrawing from the purchase could not be attributed directly to the agent. Moreover, as the agent had no involvement in the transaction until after the buyer’s offer had been accepted (the buyer did not request a copy of the sales particulars until after he had instructed his legal representative), it could not be determined that had the details of the interview been contained within the sales particulars, the buyer would not have incurred transactional costs.

It was also noted by the Ombudsman that the buyer believed that the agent should have been aware of the clause within the lease. It would be expected that any onerous clauses within a lease to be identified by the solicitor acting for the buyer during the conveyancing process; this is not the responsibility of the agent.

The buyer was seeking reimbursement of the transactional costs he incurred, but as the Ombudsman did not support this complaint, no award was made.