Inaccurate replies to enquiries

11 Mar 2013

During a property transaction, a buyer’s solicitor will usually request replies to pre-contract enquiries.  The seller is not obliged to answer these enquiries, but he is under a duty to disclose latent defects in title such as adverse easements or issues with the property boundaries. 

If the seller does provide replies to enquiries then he should make reasonable efforts to check that these replies are accurate.  Qualifying a response by saying “not so far as the seller is aware” may not be sufficient to discharge this liability and could imply that the seller has taken reasonable steps to provide the correct response. 

If there is a delay between providing the replies and exchanging contracts, then the seller should review his replies to make sure that they are still correct.  If the seller becomes aware that a response he has previously given is no longer accurate then he should inform the buyer.

If the buyer has relied on an inaccurate statement then he may have a claim for misrepresentation which could entitle him to rescind the contract.  However, the buyer will have to demonstrate that his reliance on the statement induced him to enter into the contract and that he has suffered a loss as a result.  The contract will also have to be checked as it may contain an exclusion of the seller’s liability for misrepresentation (but it is not possible to exclude against liability for fraud).