42 commercial property
The importance of accurate replies to property enquiries
The recent case of Greenridge Luton One and another v Kempton Investments has highlighted the potential dangers faced by sellers if they incorrectly complete property enquiries during a property sale, writes Daniel York, solicitor
In the above case the seller was the owner of three office buildings which were mainly let to one tenant. Prior to the sale of these properties this tenant investigated the service charges they were paying and identified a discrepancy. As a result the tenant withheld payment of the service charge and commenced a legal dispute with the seller.
During the same period the seller was marketing their property and in anticipation of the sale, replies to Commercial Property Standard Enquiries were prepared.
These replies stated that there were no disputes outstanding, likely or in the past, and that there were no service charge arrears. The replies did disclose that the tenant had raised queries regarding the service charge but stated these were on “mainly
historical issues and (that the tenant) had recently raised further enquiries”. The solicitors acting for the buyer requested additional information from the seller including the current accounts and confirmation that the service charge had been paid by the tenant. This information was not provided by the seller.
Contracts were exchanged for the sale of the property with a £812,500 deposit paid.
After exchange the buyer’s lenders requested a valuation report of the property. The valuers alerted the buyer to the service charge dispute and that the service charge payments were in arrears. The valuers advised the lender that the loan should not be drawn down until the service charge position could be verified.
The buyer’s solicitors advised the seller’s solicitors that the non- disclosure by the seller of the service charge dispute was a material misrepresentation.
The buyer rescinded the contract and in response the seller claimed that the buyer had repudiated the contact and that they were therefore entitled to keep the £812,500 deposit.
The court found in favour of the buyer and ordered the return of the deposit to them together with damages of £395,948 from the seller.
This case is a warning to sellers who are preparing replies to enquiries or who are given standard answers to approve by their solicitor. You must ensure that your replies are accurate and that all relevant information is revealed to a buyer. If not, you risk a
Kier secures planning consent at Reading Gateway
Planning permission has been secured by Kier Property at its 20-acre site Reading Gateway, subject to agreeing the S106 with the council
“We are excited to start building this important mixed-use development on a prominent site fronting the A33. In addition to providing much-needed houses, the mix of uses will help boost the local economy and generate many new employment opportunities. The planning consent is the result of several months of hard work by our professional team, in conjunction with a number of occupiers,” commented Ioan Rees of Kier Property.
The proposed mixed-use scheme comprises 175 new homes, 12 commercial units which will be developed under Kier’s Trade City brand, two car showrooms, three retail warehouse units totalling approximately 50,000 sq ft, a 120-bed hotel, a pub restaurant, coffee shop, drive- thru restaurant and a bank.
The site to the south of Reading,
www.businessmag.co.uk
close to junction 11 of the M4, is a major gateway development site for Reading which has remained vacant since HP moved off the site in 2006. “This planning consent is a major step towards seeing development on the site, and the timing is perfect given the current buoyancy in the property market,” commented Neil Seager of Haslams.
It is understood that there is strong interest from occupiers in all parts of the scheme, and as a result construction will commence in early summer. Philip Hunter of Lambert Smith Hampton added: “It is a real boon for Reading that this important gateway site is to finally coming to life. It will significantly add to the vibrancy and amenity of the location.”
Haslams and Lambert Smith Hampton are joint letting agents for Kier Property.
Details:
www.haslams.co.uk
claim for misrepresentation from a potential buyer if it is later shown that the information you have provided was incorrect.
Details: Daniel York 01276-686222 daniel.york@herrington-
carmichael.com
THE BUSINESS MAGAZINE – THAMES VALLEY – APRIL 2016
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