UK: Buyer (And Seller) Beware

Last Updated: 21 June 2016
Article by Jayne Elkins and Elinor Dean

In most property transactions, the process of providing and receiving replies to standard enquiries can often seem a futile one. When receiving replies to enquiries you can expect to see the raft of classic replies, such as "not as far as the seller is aware" and "the buyer should rely on its own enquiries". Substantive responses can be considered rare. The object for the seller seems to be to limit its risk as much as possible with the outcome being a set of generally unhelpful replies.

Although sellers may think that they are reducing risk in using this approach, it is important to know the law on this subject and how to avoid pitfalls which can result in costly misrepresentation claims. Equally, buyers and their professional advisers should be aware of how far the duty to pursue proper replies to enquiries extends for solicitors and other methods of eliciting information that can be used.

The seller's duty

Under common law, there is no legal requirement for the seller to provide replies to pre-contract enquiries. The position starts at "buyer beware", and the onus is on the buyer to find out as much as possible about the property before it enters into a contract to buy it. The duty upon the seller is only to disclose "latent defects", being title (not physical) defects which the buyer could not have discovered having made a reasonable inspection of the property; for example, easements and restrictive covenants.

However, normal practice is for the seller to provide the buyer with replies to standard enquiries (for commercial property, the Commercial Property Standard Enquiries ("CPSE"), or for residential property, the Law Society Property Information Form). This is to assist with and expedite the buyer's due diligence.


In giving replies to enquiries, sellers and their advisers should note that a statement of fact (rather than of opinion or law) in a reply to an enquiry will constitute a "representation". Subject to any exclusion clause in the contract, the buyer could have an action against the seller in misrepresentation if:

a) the buyer relies on the representation and enters into the contract;

b) the representation turns out to be false at the time the parties entered into the contract; and

c) the buyer suffers loss.

"As far as the seller is aware"

Most replies to enquiries will be stated as being limited to what is in the seller's awareness. But what is considered to be within the seller's "awareness"? In William Sindall plc v Cambridgeshire County Council[1993] EGCS 105, it was held that answering an enquiry in terms of the seller's "awareness" implies that the seller has taken reasonable steps to identify the correct answer. This can include, for example, checking its records for the property and checking with individuals within its organisation that may have the requisite knowledge.

Making these investigations can prove difficult, particularly if the person managing the property has changed, where the property has been held for a long period or records have been lost or are incomplete.

Where it has not been possible to make reasonable investigations into a reply, the reference to the seller's awareness may need to be qualified; if the seller does not hold complete records or have the requisite knowledge, the reply should state this.

Continuing representations

Representations made in pre-contract replies to enquiries are treated as "continuing" representations; they will be considered as having been represented from the moment the reply is given to the moment of exchange of contracts (FoodCo UK LLP (t/a Muffin Break) v Henry Boot Developments Ltd [2010] EWHC 358 (Ch)).

For this reason, if it is found prior to exchange that: (a) an erroneous reply was given; or (b) a reply given was true at the time it was given, but circumstances have changed and the reply is no longer true; steps should be taken to alert the buyer of this as soon as possible and, in any event, prior to exchange of contracts (Schyde Investments Ltd v Cleaver and others [2011] EWCA Civ 929).

"Buyer should rely on its own enquiries"

Sellers will often caveat a reply to an enquiry by inviting the buyer to rely on its own enquiries. In Morris v Jones and others [2002] EWCA Civ 1790 it was shown that the phrase "but caveat emptor must apply and the purchasers should rely entirely upon their own inspection and survey" may be useless in defending a claim for misrepresentation if the statement made before the caveat is false. For this reason, if the seller is unsure of a reply, it may be prudent not to give the reply at all, or to make clear that the information may not be correct.

Buyer beware

It is the buyer's solicitor's duty to pursue proper replies to enquiries, follow up where replies are not satisfactory and report to their client the result of these enquiries (even when this means reporting that a reply is not complete or that the seller will not give further information).

Since replies to enquiries can often be unhelpful, this will mean asking the seller for disclaimers and qualifications to be removed from replies where they are not reasonable and for proper answers where a matter would usually be in the seller's knowledge (eg whether it has received any notices in relation to the property).

It can also mean raising further enquiries from other appropriate sources and asking the seller's solicitors further questions where replies to enquiries and information received from other sources do not match up (Computastaff Ltd v Ingledew Brown Bennison & Garrett and another (George Trollope & Sons and Westminster City Council, third and fourth parties)  [1983] 2 EGLR 150).

Where further enquiries or searches are made to get to the bottom of issues which may not have been clear in initial replies or search results, the buyer's solicitor is under a duty to report the findings of these to his client, even though such further enquiries or searches go over and above the searches and enquiries which would usually be undertaken. As good practice, the buyer's solicitor should summarise to its client the result of each search commissioned (Orientfield Holdings Ltd v Bird & Bird LLP  [2015] EWHC 1963 (Ch) [2015] PLSCS 215) and the outcome of its enquiries.

In terms of contractual provisions, the buyer's solicitor should seek to include a provision making clear that the buyer has relied on the replies to enquiries, making it easier to found a claim in misrepresentation and, if possible, include a provision whereby the seller warrants that it has disclosed any matters of which it is aware and subject to which the property is sold, opening up an action in breach of contract should the warranty turn out to be untrue.

The buyer's solicitor should also make its client aware that, where there is a "non-reliance" clause in the contract, it may ultimately not be able to rely on information received directly from the seller or its agent in a misrepresentation claim. In a typical "non-reliance" clause, the buyer agrees that it has not relied on any information other than that included within written replies to enquiries given to the buyer's solicitor by the seller's solicitor. The buyer should be advised that any information it receives directly from the seller or its agent which the buyer considers important should be confirmed in writing by the seller's solicitor to the buyer's solicitor.


The most usual claim brought by a buyer for an inaccurate pre-contract statement is misrepresentation. The remedies available are rescission and/or damages. (If the buyer did not enter into the contract in reliance on the false statement, but still otherwise relied on it, there would not be a claim for misrepresentation, but there may be an action in tort for negligent misstatement, which is not discussed here).

Most commercial or residential contracts, if they incorporate the Standard Commercial Property Conditions (SCPC 2nd edition) or Standard Conditions of Sale (SCS 5th edition), will have a contractual limitation of the remedy for misrepresentation whereby: "An error or omission only entitles the buyer to rescind the contract: (a) where the error or omission results from fraud or recklessness, or (b) where the buyer would be obliged, to its prejudice, to accept a property differing substantially (in quantity, quality or tenure) from that which the error or omission had led it to expect." Damages are available where there is a material difference between the represented and actual description or value of the property (SCPC Clause 9.1).

However, these sorts of contractual exclusions are only enforceable subject to a "reasonableness" test under the Unfair Contract Terms Act 1977 in the case of a "business to business" sale (the test is different in the case of a business selling to an individual), and, in the case of measuring damages, may not be enforceable if fraud is proven (Greenridge Luton One Ltd and another v Kempton Investments Ltd  [2016] EWHC 91 (Ch); [2016] PLSCS 26).

It is all too easy for a seller to treat replies to enquiries as a tick-box exercise, but this is an area where the seller too has to beware.

Why this matters

Greenridge Luton One Ltd and another v Kempton Investments Ltd  [2016] EWHC 91 (Ch) [2016] PLSCS 26 is a timely reminder to sellers of the importance of:

a) avoiding "rose-tinting" information in replies to enquiries as a means of avoiding price reductions and delays in transactions; and

b) ensuring updates are made to the replies, especially if they are drafted well in advance of a sale.

In this case, the seller was selling a property at which the main tenant had withheld a proportion of service charge payments for the June and September 2013 quarters. There had been correspondence between the seller's managing agents and the tenant about the tenant's perceived issues with the service charge as far back as January 2013.

The CPSE replies were prepared in March 2013, before the tenant had started withholding service charge, and issued to the prospective buyer of the property in August 2013. They stated that there were no disputes or service charge arrears. All that was disclosed in relation to the issue was that the tenant had raised queries on "mainly historical issues and had recently raised further enquiries". The replies were not updated before they were issued to the buyer or prior to exchange. The seller did not provide up to date service charge documentation upon request from the buyer in the lead up to exchange.

Once contracts had been exchanged for the sale of the property for £16.25m, the service charge issues came to the buyer's attention. It then sought to rescind the contract on the grounds of a material non-disclosure in line with SCPC 9.1 and started proceedings for the recovery of its deposit and damages.

As it was found that the representation that there were no service charge arrears was made fraudulently or recklessly (as both the seller's managing agent and its solicitor lacked an honest belief in the truth of the statement) the buyer was entitled to rescind the contract and claim back its deposit under SCPC 9.1.

Moreover, it was found that SCPC 9.1 does not limit liability for damages for fraudulent misrepresentation (since it expresses no clear wording doing so), and so damages were assessed in the tort of deceit rather than as contractual damages. This meant that the losses claimed did not have to be reasonably foreseeable. As a result, the buyer was also awarded damages of £395,948 for wasted costs, including the cost of surveys, a valuation report and legal fees.

This article was first published in Estates Gazette on 15 April 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions