A recent case involving the sale of a £32.5m mansion in the highly sought after Notting Hill area highlights the seriousness of misrepresentation in property transactions.
The buyers who purchased the property in 2019 soon discovered a moth infestation – something which had not been disclosed to them prior to the sale. Following unsuccessful attempts to resolve the issue, it came to light that a local pest control company had treated the property for moths in 2018 on behalf of the seller, Woodward-Fisher. Reports were commissioned which identified the source of the problem as an infestation within the property’s insulation.
This was not disclosed to the buyers during the sale and the seller did not mention the moth infestation despite three direct enquiries.
The buyers subsequently brought a legal claim against the seller for fraudulent misrepresentation, seeking rescission of the contract and damages.
Read on to learn the outcome of the case and discover key lessons from our conveyancing solicitor.
The Case
The court found that the seller had given false and misleading responses to three specific enquiries:
- whether the property had ever been affected by infestation or defects;
- whether there were any relevant reports;
- and whether the seller was aware of any hidden defects.
In each instance, the court ruled that the seller’s replies were misleading. In reality, the property had suffered from a serious moth infestation, and the seller had received expert reports in 2018 identifying the issue and recommending remedial measures.
The court concluded that this amounted to misrepresentation and the seller had a clear duty to disclose both the infestation and the related reports.
As a result, the buyers were entitled to rescind the contract – effectively reversing the sale – and recover the £32.5 million purchase price, along with additional losses, including stamp duty and the cost of remedial works.
Solicitor’s Insights
- Full disclosure of material information
Full transparency is expected – sellers should disclose any known issues to enable buyers to make informed decisions and carry out effective due diligence.
- Buyer beware is not a shield
The judgment provides reassurance in property transactions as it shows the courts are prepared to unwind transactions where there is misrepresentation. Buyers are entitled to rely on the information provided by the seller – and may seek rescission where misrepresentation is proven.
- Law Unchanged, but Lessons Reinforced
Importantly, the judge described this as an “extreme” example of misrepresentation, and each case will turn on its specific facts.
- Caveat emptor isn’t going anywhere
The fundamental principle of caveat emptor (buyer beware) remains in property transactions. It is not clear whether the Claimants conducted their own survey and if they did whether the case will turn on this point. Buyers are still strongly advised to commission thorough surveys and investigations prior to purchase to ensure they understand the condition of the property.
- Enforcement can be costly – most won’t go that far
While this case reinforces established legal principles, it also highlights a practical reality: taking legal action can be prohibitively expensive. It’s important to recognise that this was an exceptional case, where the scale of the loss made court proceedings worthwhile. In most situations, buyers may not have the financial means or justification to pursue similar claims. As such, thorough due diligence remains essential to minimise risk and avoid disputes down the line.
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