Lack of Diligence Costs House Purchaser

House buyers often regard any inspection of a property beyond that undertaken by the surveyor acting for their mortgage provider as unnecessary. A recent case shows why this is a risky approach to take.

Under British law, the purchaser of a property takes it ‘as it is’ once they have contracted to buy it. Therefore, as well as satisfying oneself of the condition of the property, it is also sensible to ensure that you are aware of the exact boundaries of the land and whether any rights have been granted over it to others.

The case involved the purchase of a house on the Isle of Wight, which had a patch of land to the rear that, unknown to the purchasers of the property, had been previously let on a 1,000-year lease to the owner of a neighbouring property. That lease had never been registered at the Land Registry as it was acquired before compulsory first registration on sale applied to the Isle of Wight.

When the almost inevitable dispute over ownership of the patch of land ensued, the leaseholders attempted to register their interest in the land at the Land Registry and this application was opposed by the purchasers of the property.

The land in question was fenced off, but the fence was obscured behind a large fuchsia bush. Although the purchasers had visited the property on more than one occasion, they had not taken care to examine the boundaries. If they had, they could have raised the question of why part of the land was fenced off and resolved the situation (or not) prior to purchase.

The First-tier Tribunal ruled that a reasonably diligent purchaser would have raised the question and that, accordingly, the application by the leaseholders to register the interest in the land should proceed.