CONTACT PHILIP SYVRET
The phrase ‘let life surprise you’ might be valid from time to time, but it certainly does not apply when you are buying a property!
In acting for young clients recently in a purchase of a flat, I sent onto them, shortly after instructions, a copy of the Declaration of Co-Ownership which set out the rules relating to occupation of their flat, as well as a set of regulations which had been adopted by the co-owners association imposing restrictions on occupancy such as use for Airbnb and owning pets.
The clients were delighted to receive the information. They had asked the estate agent for details but the agent’s response was, “it is part of the conveyancing process and your solicitor will tell you the restrictions”. The agent could not be persuaded to obtain details. The problem is, of course, that by the time the information came through from the solicitor, my clients had already spent a considerable amount of money on a survey, legal fees and a booking fee for a mortgage rate.
I see this problem regularly. Often the buyer finds the property of their dreams and falls in love with it. All they really want to know is how quickly they can collect the keys and move in.
On the other hand, the agent works for the seller and there is a disincentive to reveal information that might put a buyer off, leaving any bombshells to be revealed when the buyer is already heavily committed in terms of their passion for the property and costs incurred.
The potential bombshells are wide ranging: there may be restrictions on parking commercial vehicles or running a business from the premises. The long garden wall that is about to collapse may be a party wall to which the neighbour can force the buyer to complete expensive repairs. The service charges may be beyond the buyer’s budget.
Different things will be important to different people so determining the information that should be provided to a prospective buyer before or at the time of viewing the property is always going to be difficult.
Those who have bought and sold recently will be familiar with the Law Society Standard Questionnaire (SSQ). That provides a limited set of warranties confirming the seller’s knowledge as to any known defects in, say, the electrical system, drainage system or items such as disputes with neighbours. It cannot possibly, however, cover all aspects of disclosure that would be of interest to a particular buyer. Equally, disclosure of the SSQ often comes at the end of the process given the need to circulate between seller, buyer and their respective solicitors.
The consequence of a lack of early disclosure causes, at least, delay, or worst, the collapse of a transaction (and any related chains of transactions) causing costs and anguish to all involved.
How then do we resolve the problem to ensure that a last-minute bombshell of disclosure does not arise?
First, buyers need to get clued up. Questions asked of the agent or the sellers should be directed to the buyer’s particular needs. Ask about relations with the neighbours, restrictions on occupation, difficulties encountered with the property. If answers are not immediately available, indicate that you are prepared to make an offer but only when those questions are answered. In the present sluggish market, that will induce very quick answers indeed.
Equally, the estate agents need to be on their game. They need to quiz the seller in advance on all aspects of the property so they can be ready with immediate and accurate answers to any questions that a buyer will put.
Propertymark, the leading Estate Agents association in the UK, now produces a property information questionnaire known as a ‘PIQ’. This is completed by the seller to give to a potential buyer detailed information about the property being sold. This was brought in as part of the English Law Society Conveyancing Protocol with the intent of streamlining the procedures used in residential conveyancing. Its questions are more wide-ranging than the limited matters presently adopted in our SSQ.
I would suggest that the time has come for local estate agents to work hand in hand with Jersey property lawyers to produce a preliminary PIQ that could be handed to purchasers, answering a standard set of advance disclosure items. Those would include the Energy Performance Certificates which are to come in next year for residential properties.
I would not suggest that a PIQ would constitute binding warranties, but instead a statement which the vendor declares to be fair and accurate for guidance purposes pre-completion. Whilst matters would remain for surveyors and solicitors to verify as part of the standard due diligence, the risk of a late disclosure bombshell arising would be considerably reduced.
Perhaps then, at least in terms of property purchases, we will be able to swap out the phrase ‘life is full of surprises’ to the more worldly-wise ‘nothing surprises me anymore’!
Philip Syvret is a Jersey property lawyer with 30 years’ experience in dealing with residential and commercial property purchases. He sits as a Member of the Law Society Conveyancing Sub- Committee advising on improvement and amendments to the conveyancing process in Jersey and was instrumental in the introduction of the Law Society’s Standard Seller’s Questionnaire (SSQ).
To contact Philip, telephone Benest & Syvret on 875875 or email via email@example.com