Selling a house can be highly stressful. Often, it involves months of people traipsing through your home, time-wasters who are just being nosy, offers that are well below the asking price, lengthy negotiations, and even gazundering (when the buyer reduces their offer at the last minute).
So, when contracts are exchanged, all the paperwork has been finalised, and the money is in your account, it’s only natural to want to breathe a huge sigh of relief that the whole conveyancing process is finally over. We hate to be the bearer of bad news, but unfortunately, it isn’t time to relax just yet.
When you sell a house, you are legally responsible for disclosing to the buyer any known defects or issues with the property that could affect its value or safety. If you fail to disclose information such as this, you could be held liable for any damages or losses that the buyer incurs as a result.
In this article, we’ll reveal how long you are liable after selling a house and advise on what you can do to avoid any unexpected legal or financial issues down the line. We’ll also advise buyers on what to do if they find a problem with their house either before or after completion.
Am I liable for anything once I’ve sold my house?
If you were misleading about your house, there might be a statute of limitations that allows the buyer to file a lawsuit against you for defects or issues with your property, even after you’ve sold it. The length of the statute of limitations varies depending on the state and the specific circumstances of the case. Usually, the buyer will have six years to bring a claim against you, but in some instances, it can be as little as three.
You will also be responsible for fulfilling any contractual obligations you may have made in the sale agreement, even after the sale is complete. For example, if you agree to make repairs or provide certain warranties for a set period of time, you may be liable if you fail to fulfil these obligations.
What information must you disclose when you sell your house?
For many years, it was the responsibility of the buyer to determine whether a property they were interested in had any issues to be concerned about. Under the principle of ‘Caveat Emptor’ (which translates to ‘buyer beware’), the seller was not legally required to disclose any known or unknown defects with the property.
However, since 2013, under the Consumer Protection Against Unfair Trading Regulations, sellers must divulge any issues which might affect the buyer’s decision to buy — whether the buyer asks about an issue or not. If a seller omits anything deliberately, they can face prosecution.
When you sell your house, you will need to provide the following:
- Proof of your identity
- The property title deeds
- An Energy Performance Certificate (EPC)
- Shared freehold documentation
- A management information pack
- A fittings and contents form
- The mortgage details
- An acceptance of offer
Additionally, you must provide a Property Information Form.
Property Information Form (TA6)
The Property Information Form (TA6) is a document containing information about the property which enables the buyer to make an informed decision about whether or not to buy.
The information on the form is split into various categories, including:
- Property boundaries
- Any alterations to the property (for example, an extension)
- Shared areas with neighbours
- Formal and informal agreements regarding the property
- Disputes or complaints made by or about the seller
- Occupiers who live at the property
- Guarantees and warranty conditions that affect the property
- Environmental concerns
You must fill this document out fully and truthfully before giving it to your solicitor, who will pass it to the buyer’s solicitor. Leaving out details will arouse suspicion, and the buyer may think you are deliberately trying to hide something. This could cause them to request a post-survey renegotiation or withdraw their offer completely.
Here are some examples of issues you could be liable for if you don’t disclose them:
- Disputes with neighbours, especially those that have resulted in written exchanges or the involvement of the local authority or police
- Neighbours with Anti-Social Behaviour Orders (ASBOs)
- High levels of crime in the area
- A violent death that happened on the property
- Past or present flood issues
- Structural issues
- A previous sale falling through as a result of a poor survey report
- Planning permission on the property, whether pending, granted or denied
- Proposed planning in the area
- An existing or planned flight path
- A motorway within view or one that’s planned
- Current or past pest problems
- Japanese knotweed
- Car parking rights
- Buildings insurance details
How to avoid being held liable
As mentioned, it is vital that you are up-front about any past or present issues with your house. Otherwise, you could face legal action months, or even years, after completion.
If you have had an issue in the past, a buyer won’t necessarily be put off, especially if you can demonstrate that you’ve dealt with the problem. If, for example, you had a dispute with a neighbour that was resolved, you can show your buyer written correspondence to prove that the matter was dealt with. Similarly, if you dealt with a woodworm problem in the past, you can give the buyer any paperwork that shows this.
The best way to avoid being held liable is to provide as much information as possible. Not only should this reduce the risk of legal action being taken against you later down the line, but if you are taken to court, you will be in a much better position the more thorough you’ve been on the TA6 Property Information Form.
If you are concerned that full disclosure will make your property unsellable, it can be tempting to consider leaving out certain details. But instead of this, a better option would be to sell to an investor. Because they will not be living in the house themselves, they will be less worried about noisy neighbours and car parking rights, which means you can be completely open with more confidence that the sale will go through.
Advice for buyers
Going to court can be stressful for buyers as well as sellers. It’s time, money and hassle that neither parties want to deal with. So, to prevent it from getting to that stage, we thought it would be helpful to include some advice for buyers too.
Hire a surveyor
While the law states that the seller must be as upfront as possible when filling out the TA6, hiring a surveyor to inspect the house on your behalf will give you extra reassurance, as well as negotiating power. They will check that the house is up to standard and will be able to uncover any problems that the buyer has not made you aware of.
Some of the issues they will look for include
- Damp and dry rot
- Electrical issues
- Faulty drains
- Health and safety issues, for example, asbestos
- Japanese knotweed
- Pest infestations
- Poor insulation
- Roofing issues
- Structural issues
These are all examples of problems that could negatively affect the value of the property. Your surveyor will also note smaller issues — such as a leaky shower head — but because these don’t affect the value of the house, they are not usually worth pursuing with the seller.
Surveys are not technically required, but it is recommended that you arrange one, even though it will cost you a couple of hundred pounds. If it saves you thousands of pounds in future repair costs, it will be well worth it.
Another benefit of arranging a survey is that if you uncover any problems that weren’t disclosed when they should have been, you can make a claim against the surveyor.
What to do if you find a problem
If you discover a problem before completion, you can do the following:
- Withdraw your offer
- Negotiate a lower price
- Ask the seller to fix the problem
It is worth remembering that either party can walk away without penalty before the exchange of contracts.
However, if you discover a problem after completion, things become more complicated. The more time that passes after completion, the harder it will be for you to prove you’ve just discovered an issue.
If you can prove that the issue was there at the exchange of contracts stage, you could be entitled to compensation months, or even years, after completion. If successful, you will likely be awarded the difference between the amount you paid for the house and its current value in light of the issue.
Note that to claim damages, the issue must be a genuine defect rather than a matter of opinion, and it must negatively affect the value of the property.
In some cases, a buyer may wish to make a misrepresentation complaint against their conveyancing solicitor or estate agent rather than the seller.
If you believe you have been misled, it is recommended that you seek legal advice from a professional.
Conclusion
If, when you sold your house, you were misleading about any past or present issues, the buyer has up to six years to bring a claim against you. (In some instances, though, they will only have three.) You will also be responsible for fulfilling any contractual obligations you may have made in the sale agreement, even after the sale is complete.
Understanding your legal and financial liability when selling a house is important to ensure a smooth and successful sale that won’t come back to bite you at a later date.
