Protect yourself from unscrupulous sellers
It's said that buying or moving homes is up there with death and divorce in terms of stress – and that's if things go smoothly.
So what happens when there is misunderstanding or a breakdown in communication between buyer and seller, or if the seller is 'economical with the truth', and you end up with problems you didn't bargain for?
Kate Hall, a 34-year-old public relations consultant, and her partner Simon Davis, 36, know this scenario only too well. They bought their three-bedroom home in Toton, Nottingham, just over two years ago for £200,000.
"The morning after moving in I had a shower in the ensuite bathroom," says Kate. "Halfway through, Simon shouted upstairs to me to switch it off as the dining room ceiling below had collapsed and water was pouring through.
"We discovered that the shower tray had actually been propped up with six empty tubes of silicone sealant, as the wooden frame had completely rotted.
The fact that there were six tubes is an indication of just how much sealant the last owners had used to try to cover up previous damage."
In subsequent weeks, Kate and Simon uncovered more and more slapdash DIY around the house. "For example, I leant against the downstairs toilet wall and my hand went straight through it," says Kate.
"We pulled back the paper to uncover three large holes. We also had to smash a kitchen unit apart to access the boiler so it could be serviced, as it had been boxed in."
GET A SURVEY
Kate and Simon telephoned their solicitor to find out what they should do, but were informed they had no recourse at all. This was because the pair had opted against having their own survey carried out on the house.
The valuations conducted by their mortgage lender was only to ensure the property was adequate value for the loan.
"We had decided not to pay for a survey as the house was only 20 years old, but in hindsight this was a mistake," says Kate. "It would at least have provided a starting point to access some kind of compensation."
However, even if they had carried out a Homebuyer's Report (or an even more expensive structural survey), Kate and Simon could still have found themselves negotiating a legal minefield, according to Tracey Kellet, managing director at BDI Homefinders.
"There are still so many grey areas with surveys," she says. "For example, surveyors' instruments for reading damp are so sensitive now the results can be frightening if you're a potential buyer, but it doesn't mean to say it's a problem.
"You're best off calling in an independent damp expert who will let you know if the level is within acceptable benchmarks."
CALL IN THE EXPERTS
While all the contents of a survey must be correct (all chartered surveyors carry indemnity insurance in case they are sued for making a mistake), they'll come with plenty of caveats too, adds Kellet.
"They will usually specify they are not plumbers or electricians and will only look at the roof with binoculars rather than checking it thoroughly.
"If buyers want to be extra-sure, they should focus on the major points and call out experts to assess them. A plumber and electrician can easily be commissioned to check over the house for around £100 each.
"It might be a hassle, but it's not expensive in comparison with the total cost of buying a home."
Bringing in an independent electrician is something that Sara Teiger, a 35-year-old freelance marketing consultant, wishes she had done, in spite of the fact she had already forked out around £500 for a Homebuyer's Report when she bought her Manchester-based three-bedroom semi nearly 10 years ago.
"The survey was useful in that it highlighted a loft beam that had been there since the 1930s which needed replacing," says Sara.
What the survey didn't throw up, however, was a potentially lethal problem with the electrical wiring. "As the house only had storage heaters, I hired a tradesman to fit central heating before moving in," says Sara.
"But as he took up the floorboards, the poor man touched something live and literally flew across the room. He said it was the worst electric shock he'd ever had."
The tradesman told Sara that the previous owner had rewired the whole house himself – and made a complete botch of it.
"He said that a lot of the wires were not earthed and some entire walls were live, which I took to mean you could get a shock by touching the wrong part of the wall.
"He told me to get in an electrician immediately to rewire the whole house." This was a harsh lesson that surveys don't investigate electrics. "The only mention in the survey was that appliances and switches 'appeared modern'," she says.
However, homebuyers are better protected these days. In 2005 the government introduced electrical safety rules across England and Wales, which state that any fixed electrical installation work carried out in the home must meet building regulations.
This means that – whether it's fitting a circuit for the first time or rewiring – the work must be completed by a certified electrician. You can find one in your local area by going to niceic.org.uk.
Sara didn't take the matter further at the time, but added she would view the situation differently now. "I have a child now and dread to think what could have happened – the electrician said someone could have died. I'm relieved the law's changed."
CHECK THE FORMS
As well as understanding what information a survey does and doesn't provide, you should also get to grips with the various forms you'll receive from the seller that carry important details about the property – especially as some forms are more valuable than others, as Paul Marsh, property lawyer and past president of The Law Society, explains.
It's the seller's property information form (SPIF) that you should take heed of, he says. This is one of a series of documents passed from the seller's solicitor to the buyer's.
"The SPIF asks a series of legally worded questions about the property for sale, such as moved boundary features and past disputes with the neighbours," he says.
"The copyright of this form is owned by The Law Society and sellers are legally bound to answer existing questions honestly and accurately." However, Marsh adds, beyond this it becomes a case of 'caveat emptor'.
The importance of asking specific questions is something that Kate and Simon have learned from experience.
"When we complained to our solicitor about the state of the house, he said that not only did we not have a survey, we didn't actually ask the sellers specifically if there was anything wrong with the house. As a result, we were on our own."
But what happens when a buyer completes the transaction and moves in before discovering that the answers on the SPIF – and/or any additional questions they have raised and legally documented – are incorrect? In practice, you're usually stuck, warns Marsh.
"Once you've found a property you like enough to buy it's going to be a tough call to move out, even if something was illegally left undisclosed in the SPIF or related document. Instead, most people opt to stay put but go after compensation via the courts.
Then, of course, there's the question of what that compensation should be – it's all very arbitrary," he says.
WHEN TO BACK OUT
If you do want to back out it's obviously best to do it before you exchange contracts. However, if you have been misled it's still possible to pull out between exchange and completion.
"The euphoria of having your offer accepted is over and it's not too late to back out if you find you've been clearly misled in writing," says Marsh.
In this case, you can rescind the contract and will receive your full deposit back plus expenses and potential compensation. But this isn't simple either – not least because you'll still be committed to selling your current home to your own buyers.
Having carried out the appropriate survey; done your own homework by visiting the property at various times of day; gone through the SPIF with a fine-tooth comb; and asked – and documented – any additional questions, it's sometimes a case of just being flexible, says Kellet.
"Ultimately, so long as major factors have been dealt with, buyers have to be realistic and not lose sight of the wood for the trees," she adds. "Try to see damage you didn't spot as a percentage of the overall value."
This was the stance that Kate and Simon decided to take. "Although I was pretty angry at the time, I was also eight months pregnant and the fight would have been too stressful," says Kate. "And our insurer paid out for the water damage very quickly."
Kate, Simon and their two boys Owen and Jack, now six and two, love their house and don't regret buying it. But as Kate says: "I'll be a little more wary next time."
Five questions sellers must answer
1 Has any boundary feature been moved in the last 20 years?
2 Does the seller know of anything which might lead to a dispute about the property or property nearby?
3 Is the seller aware of any proposals to develop property or land nearby, or to make alterations to buildings nearby?
4 Has the property suffered from flooding?
5 Is the sale dependent on the seller buying another property?
Five questions sellers can keep quiet about
1 Do any aggressive animals reside in an adjacent property?
2 Does the property need a new boiler?
3 Does the electric garage door work?
4 Is the road noisy or intimidating on weekend nights?
5 Do commuters or shoppers use the road for parking?