Flat buyers take seller to court over electrical safety concerns

Tuesday 24 August 2021

Buyers of a £345,000 flat have launched a Royal Court battle with the seller after discovering what were described as “extremely concerning” safety issues with electrical systems and other alleged defects with the property.

The pair bought the flat from the woman - whose lawyer claimed the accuracy of any statements given about the property was "not guaranteed" - in July 2020 by Share Purchase Agreement.

They now want her to pay £100,000 to cover the cost of repair work they say needs to be done.

Ahead of the sale, the pair had made a number of enquiries about the property through their lawyer.

Among other things, they sought confirmation that the electrical systems had been tested and were all “in good working order and fit for purpose” twice within the same document. On both occasions, the reply, sent by the seller’s lawyer, said “our client confirms”.

Pictured: An Electrical Inspection Report reported “extremely concerning issues” with the flat's electrical systems.

Six months after the sale, however, the pair said they noticed an electrical fault in the flat.

They claimed an Electrical Inspection Report reported “extremely concerning issues” with the electrical systems, including a lack of protective tubing on the power supply to the sockets, high resistance readings, the absence of earth wires, “poor workmanship and a complete disregard of the relevant wiring regulations”, according to the judgment.

They also said that "it had transpired that the Defendant had relocated and/or added additional sockets in various rooms of the Apartment including the addition of wiring in the bathroom to service a heater, extractor fan, speaker and lighted mirror", and said they had been advised of a lack of periodic inspection and protection against mechanical damage.

The pair alleged that the replies given by the owner to their enquiries had been “knowingly false and a misrepresentation” and sought over £100,000 for the entire cost of repair works said to be required.

They relied on a statement from a neighbour, who said he had been told the seller and her partner had done electrical work in the flat themselves.

An electrician, who had carried out works in the property, said he had only rewired a bathroom and replaced a consumer unit and that any other electrical work had been carried out by the seller. He also said there were underlying faults in the living room and study room and that the circuits in those rooms had failed the tests he carried out.

Pictured: The seller relied on an email which stated the accuracy of her answers was not guaranteed.

In a letter to a Senior Building Controls Surveyor from the Government, the electrician had also explained that the seller’s husband had turned down a quote for testing, against the advice of the electrician.

The seller, however, said the buyers were not entitled to place “any (legal) reliance” on the answers she had provided as she had not “guaranteed” them, as the email accompanying them stated: “The responses are believed to be correct and given in good faith, but the accuracy is not guaranteed."

She further argued the buyers could have carried out tests if they wanted.

The clash came to the Royal Court last month, when the seller requested what's known as a 'summary judgment' - when a court rules in favour of one party against another without a full trial taking place.

Her lawyer, Advocate Howard Sharp, argued that by not guaranteeing the accuracy of any answers given, the responsibility for verifying the accuracy of any answers given was passed to a purchaser.

But Advocate Ashley Hoy, who was representing the buyers, submitted that there was a distinction between hidden defects and the ability to rely on information provided.

He noted that the seller had replied “rely on your own researches” to a question about drains, arguing she could have made a similar statement regarding the electrical systems. He suggested that the seller’s argument relying on the email rather than the replies was “perverse”.

The case was heard by Advocate Matthew John Thompson, Master of the Royal Court, who concluded there was an “arguable case” that the seller knew that electrical works had been carried at the property during her period of ownership and that they had not been tested.

Pictured: Advocate Matthew John Thompson, Master of the Royal Court.

He went on to say there was “sufficient evidence” to show she knew the answers she had given were untrue - evidence she had chosen not to contest.

He said that if he agreed with Advocate Sharp’s suggestion that the email excluded any liability for the answers given to the enquiries made, the system of pre-contractual enquiries would become “pointless” as buyers would not be able to rely on any replies given.

He concluded that the seller should not be permitted “to qualify those answers in a covering email with a generic statement of the accuracy of the answers is not guaranteed”, and that such a statement would not be enough to exclude liability for answers directly known to a seller.

“Whether that liability is for deliberate misrepresentation or for breach of warranty does not matter; the wording in either scenario was not sufficient to exclude liability,” he wrote.

“There was insufficient clarity in the email of 18th June to exclude the reliance that a purchaser can place on answers to representations at least where those answers are matters within a vendor’s own knowledge. The phrase relied upon cannot also be used to permit vendors to give answers they know to be untrue.”

He dismissed the seller’s application for summary judgment and encouraged both parties to mediate their differences, warning them they would “quickly incur more costs” if they didn’t.