Buyer Beware Principle Means Compensation Denied

‘Buyer beware’ is a legal concept with which purchasers of goods and property have had to contend for centuries. It applies to most transactions where specific protection for purchasers is not provided under the law. It was rigorously applied in one recent case in which a couple paid £625,000 for a secluded home shortly before developers sought planning consent for two substantial housing developments nearby.

A month after the couple bought the house, a planning application was lodged to build more than 700 new homes about 300 yards away, on land that had been identified as a potential site for major housing development. Some months later, another developer sought permission to build 800 homes in the area. Consent for the latter project was at first refused, but was subsequently granted.

The vendors had indicated when answering pre-sale questions that they were unaware of any planning notices and had not had discussions with anyone regarding matters that might affect the value of the property.

The purchasers argued that the value of their home would be blighted by increased traffic flow and the dust and noise of so much building work. They said that they now could not wait to leave the property and that they would never have bought it had they known of the development proposals in advance.

They sought substantial damages in respect of their mental distress and the alleged diminution in the value of the property from the vendors of the house, accusing them of misrepresenting the truth as to their knowledge of any planning proposals on the horizon which might affect it.

In dismissing their claim, however, a judge noted that housing policies for the area were at a formative stage before the sale and no actual planning applications had been put in to develop either site. The vendors’ replies to the pre-sale questions were neither misleading nor incorrect and expressed their honest opinions which were reasonably held at the time.