Selling or letting property – a warning against misrepresentation

A recent case handled by Michelmores on behalf of their clients, the Wakleys, obtained a judgment against the Crown Estates for misrepresenting the quality of a farm’s equipment and infrastructure (milking parlour, slurry and disposal system, water supply) and the silage purchased.  The incoming tenants found that systems were not up to standard and caused delays and costs in rectifying the problems.  The silage was contaminated causing deaths amongst the tenant’s dairy herd.

The case was complicated by the fact that the tenants moved onto the farm under a temporary licence or tenancy and were well aware of the problems before the final tenancy was agreed. However it was acknowledged that the tenants could not easily move elsewhere, once they had experienced the problems, and felt they had to sign up to the new tenancy.  In fact their agent had negotiated express terms requiring the landlord to remedy the issues.

The Crown Estates were ordered to pay £1.75 million in damages to the tenant, partly based on direct losses and partly on loss of profits.   They had relied on information given to them by others and had not made reasonable enquiries to ensure that the information was correct.   There were inadequate notes made of farm visits to record the detail required for the sale.

The case illustrates the importance of ensuring that the information given to land agents and solicitors when selling property and replies to pre-contract enquiries must be true and accurate and that one must make reasonable checks to back up the replies given.

If you would like to discuss this please contact Head of Agriculture & Rural Property Penelope Edgar.