An End To Caveat Emptor?

A recent practice guide by the Law Society has managed to drop a small bombshell on land law practice by suggesting that consumer protection laws might affect a significant number of everyday transactions by imposing on solicitors a direct requirement to disclose defects with a property.

Consumer protection has long been one of the pillars of EU law. The Unfair Contract Terms Act 1977, a key early act, has steadily been extended, including major changes via the Consumer Protection from Unfair Trading Regulations 2008 ("the 2008 regulations"), which replaced many earlier acts and created new offences. The Consumer Protection (Amendment) Regulations 2014 ("the 2014 regulations") changed the landscape by creating a number of private law remedies for consumers where there are breaches of the 2008 regulations' prohibited practices.

It is the 2014 regulations which are causing such consternation for, as well as introducing the new private law actions open to consumers, it also changed a number of definitions.

The law outside of the regulations

The 2008 regulations were designed for the state control of offensive trading practices (eg pressure selling tactics) and the 2014 regulations added direct remedies for consumers. What neither did is remove other legal remedies; however, the 2014 regulations do prevent a duplicated claim for the same loss.

Most people have heard of the saying caveat emptor (or "buyer beware"), which is the classic position for land contracts in England and Wales: it is up to the buyer to make proper enquiries and inspect as they will be deemed to take the property as is. This is far from the whole position and there are a number of significant exclusions:

Latent defects: technical defects in the quality of the legal title to a property that are not reasonably discoverable by looking at the paperwork or from inspecting the property, eg an undisclosed restrictive covenant. If they exist, their presence may allow the buyer to walk away from a transaction. Fraud: for example, a buyer removing various paving slabs from around a listed building for use elsewhere and denying they were part of the listing of the building (Taylor v Hamer [2002] EWCA Civ 1130; [2003] 1 EGLR 103). Misrepresentation: incorrect replies to enquiries that cause damage to the buyer/tenant can lead to a claim. A misrepresentation is not only an out-and-out incorrect answer but also overly rose-tinted views of the position. For example, playing down a tenant...

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