When is a garage not a garage? A garage is described as ‘a building or shed for housing a motor vehicle’. So, what is a motor vehicle? Can this include a motorbike? A moped? Anything with an internal engine? These are the kinds of questions solicitors and estate agents will have to consider asking themselves. If a property is misrepresented in some way, an individual will potentially have a claim against that firm or company under the Property Misdescriptions Act 1991.

This Act “prohibits the giving of false or misleading statements in certain specified matters in the course of estate agency or property development business”. This can include a wide variety of statements as well as pictures and videos. Although having your clients fill in and sign their Property Questionnaire minimises the risk, it will not protect you if you print a misdescription you could have reasonably checked yourself. The maximum fine on summary conviction is £5,000 per offence and on conviction on indictment an unlimited fine.

A false statement is one which is false to a material extent (i.e. not trivial). A material degree will vary with circumstances and an objectivity test will apply. The extent to which a statement is false must be material but it is possible for a statement to be misleading without actually being false if a reasonable person would draw a false inference from it. Equally a statement may be misleading if it is incomplete. The Act does not create a duty to volunteer information but imposes an obligation to ensure that any details which are given are accurate.

In considering whether an offence had been committed, a court would be likely to base its view on what a normal prospective purchaser would consider to be false to a material degree having regard to generally accepted standards. An example of a property misdescription can include describing an entire property as ‘recently re-decorated and beautifully refurbished’ when this can only apply to 1 or 2 rooms in the property. The Act does not require you to disclose defects such as a leaky roof. However, the description as a whole must not give the impression that the property does not have that defect. And of course, if a garage cannot accommodate a motor vehicle, it should not be described as a garage.

There is a defence to show that all reasonable steps have been taken and all due diligence exercised to avoid committing the offence. General disclaimers are not prohibited by the 1991 Act. They cannot be relied on in preventing an offence, however, there are some cases where a specific qualifying description may be acceptable. A qualification may be applied to the working order of household appliances or central heating. The crucial fact in assessing whether a qualified description is valid is the ease with which you could have reasonably checked it.

The Government is currently reviewing the need for the Property Misdescriptions Act in view of the introduction of the Consumer Protection from Unfair Trading Regulations in 2008. A consultation paper issued by the Department for Business Innovation and Skills in early 2011 indicated that the thinking was that consumers are protected by two broadly equivalent pieces of legislation. This duplication may be unnecessary and the 1991 Act could potentially be repealed without affecting consumers.

Nonetheless, this is something that many businesses and estate agencies should be aware of. It may not be practicable to have your Oxford Dictionary on stand by every time a property schedule is prepared, but no fact should be misleading or false to a material degree. Beware what you say, what you type and what you sell!

For further information please contact our Property Sales Team at our 220 Union Street Office, Telephone 01224 572777.