Why raise enquiries?

In addition to carrying out searches in respect of a property, the prudent buyer should also raise any enquiries of the seller that may be relevant to the transaction and the particular property. Indeed, the standard conditions of sale incorporated into the sale contract will normally state that the property is sold subject to all matters that would have been revealed by those enquiries that a prudent buyer would have raised before entering into the contract. Accordingly, it is essential that the buyer should be aware of all such matters, since he will be buying subject to them.

Who raises enquiries?

It is normal practice for the buyer’s solicitor to raise enquiries on behalf of the buyer and send these to the seller’s solicitor. However, where a ‘package’ of legal information relating to a property is prepared at the outset by the seller, standard replies to enquiries may be contained in that package. In that case, the buyer may wish to raise additional enquiries in relation to matters not dealt with in the standard enquiries.

When should enquiries be raised?

Enquiries should be raised as early as possible in a conveyancing transaction, although normally a buyer’s solicitor will wait until he has received the initial papers relating to the transaction, in order that irrelevant enquiries can be deleted (and additional ones inserted) before the enquiries are sent to the seller’s solicitor. Additional enquiries will often be raised after the making of the initial enquiries, right up to exchange of contracts, as further information relating to the property or the transaction comes to light or is agreed and further points need to be queried .

Forms of enquiries – residential transactions

In residential property transactions, it is normal for the Seller’s Property Information Form (SPIF) to be used, together with the Seller’s Leasehold Property Information Form (SLIF) in the case of leasehold properties. The seller will complete the replies in Part 1 and send the form(s) to his solicitor, who will check the replies (and any other information which he may have, such as old files or deeds) and complete and sign Part 2 to confirm that he has done so.

The SPIF contains questions relating to ownership of boundaries, disputes about the property, occupiers’ interests, planning requirements, guarantees affecting the property, approximate completion date, fixtures and fittings, and details of notices received by the seller which affect the property. The SLIF contains additional questions relating to the landlord, service charges, etc.

The information contained in the SPIF or SLIF may overlap with the information already provided within the HIP.

Forms of enquiries – commercial transactions

Although other forms are available, and it is not uncommon to find solicitors using their own customised forms of enquiries, it is recommended that the Commercial Property Standard Enquiries (CPSE) should be used in all commercial property transactions. The CPSE were originally prepared by the London Property Support Lawyers Group, and are generally accepted for use in the industry. They are very comprehensive, and include (in the case of CPSE.1, General pre-contract enquiries for all commercial property transactions) enquiries relating to boundaries and extent, party walls, rights benefiting the property, adverse rights affecting the property, title policies, access to neighbouring land, access to and from the property, physical condition, contents, utilities and services, fire safety and means of escape, planning and building regulations, statutory agreements and infrastructure, statutory and other requirements, environmental, occupiers and employees, insurance, rates and other outgoings, capital allowances, Value Added Tax (VAT) registration information, transfer of a business as a going concern (TOGC), other VAT treatment, standard-rated supplies, exempt supplies, zero-rated supplies, transactions outside the scope of VAT (other than TOGCs), notices, disputes, Stamp Duty Land Tax (SDLT) on assignment of a lease, deferred payments of SDLT and commonhold.

The CPSE comprise a suite of documents, as follows:

In addition, there are SCR Solicitor’s completion requirements and GN/SCR Guidance notes on SCR Solicitor’s completion requirements, together with a Disclosable Overriding Interests questionnaire and GN/Disclosable Overriding Interests questionnaire.

Liability of seller for inaccurate replies

The seller may be liable to the buyer if any reply to an enquiry is inaccurate. Liability will be in misrepresentation – so an inaccurate but honest reply is unlikely to give rise to liability, and liability will only arise where the buyer has actually been induced to enter into the contract in reliance upon the reply.

Great care must be taken in wording replies to enquiries if the seller is to avoid liability to the buyer. For example, a statement that the landlord was not aware of any dry rot but suggesting that the tenant should carry out his own survey carries with it an implied representation that the landlord has made reasonable investigations of the matter (see Clinicare Limited v. Orchard Homes and Developments Limited [2004] EWHC 1694). However, there is no implied representation by the seller/landlord that proper records have been kept – such a representation was proposed in the case of William Sindall v. Cambridgeshire County Council [1994] 3 All ER 932 but rejected by the Court of Appeal (although it should be noted that the Court went on to say that if the deeds of the property had been eaten by mice or destroyed by enemy action, then the seller must disclose these facts) .

It is common for a seller to respond to an enquiry, particularly in relation to the physical state of the property, by stating, “Not to the seller’s knowledge but no warranty is given and the buyer must rely on his own inspection and survey”. It has been held (Morris v. Jones and others [2002] EWCA Civ 1790) that the denial of any warranty and the statement that the buyer should inspect or carry out a survey will not protect the seller if the reply also contains a misrepresentation, namely that the seller is not aware of the particular matter enquired about. However, a simple response directing the buyer to inspect or carry out a survey, without any statement as to the seller’s knowledge, will not generally cause any liability to be owed by the seller to the buyer, even if the seller is aware of a particular defect .

Where an inaccurate reply results from the seller’s solicitor’s negligence, he will be liable to his own client. However, the seller’s solicitor owes no duty of care in negligence to the buyer (see Gran Gelato Limited v. Richcliff Group Limited [1992] Ch. 560), and the CPSE specifically exclude such liability.

In the case of Doe & another v. Skegg & another (LTL 20/10/2006), the vendors had experienced problems with their neighbour's son trespassing on their drive and harassing them, and wrote to the neighbour threatening legal action unless the son desisted from such behaviour. However, when completing the seller's property information form for the sale of their property, the vendors answered "no" to the questions relating to disputes or complaints or whether any letters had been received or sent affecting the property. The purchase was completed, the purchaser moved in and became aware of the behaviour of the neighbour's son. The purchaser successfully issued proceedings for damages for fraudulent misrepresentation; the Court held that the vendors knew that they ought to disclose the existence of the dispute but did not do so because they feared it would affect the sale of the property. The representation on the SPIF had been made fraudulently, as the vendors could not reasonably have believed that what they had written was true.

Dealing with adverse replies to enquiries

As in the case of an adverse search result, an adverse reply to enquiries should be referred to the buyer for instructions. It may be that more information is required, or perhaps insurance cover may be available. Sometimes, an amendment may be required to the sale contract relating to the property, or the purchase price may need to be reduced or a retention made from the purchase moneys. In a few cases, the buyer may decide not to proceed with his purchase, although this is relatively rare.