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  • Property-a-holics

    Misrepresentation and "Subject to Contract"

    Hello,

    I had an offer accepted on property where I was told by the agent that a boiler would be installed at the seller's cost prior to exchange. This information was volunteered by the seller's agent and at the time there was no boiler in the property (or it turned out later any gas meter) and no mention of this was made in the particulars. I subsequently made an offer which was accepted. I would have not have made the offer had the seller not told me that he would install a boiler.

    A couple of days before exchange/completion the seller said that he was no longer willing to fit a boiler and that I would have to do it. I did not have the funds available to do this so the transaction fell through.

    I relied on the seller telling me that he would install the boiler and incurred over £1k in fees. Do I have any options for redress? There was no mention of installation being "subject to contract" and the seller's solicitor let slip that the seller had only budgeted £500 to buy, install and test the boiler (good luck!). Does that constitute negligence?

    Thank you
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    Unfortunately its just one of a multitude of things that can potentially broadside a deal up until exchange and you have to put it down to experience. Any legal recourse I`m sure will fail. If the details did not mention a boiler or gas meter then that is a fair representation if there are none in the property. Your visual checks on viewing would confirm that fact and your offer should be based on that.

    And the words `subject to contract` mean exactly that. Anything verbally said or not said up to contracts being exchanged is largely immaterial. Speak to your solicitor about legal undertakings which can assist but its important to fully understand what the conveyancing process can or cannot achieve on your behalf . The estate agent is largely irrelevant to the process once the offer has been accepted. The solicitors then take over to protect both parties interests. The all important `Fixtures and Fittings` list is attached to the contract and forms part of it. Some I see fall well short of my expectations on detail so I amend them if required to ensure I get what i pay for.

    Its an unsatisfying system we have in so many ways so you have my sympathies. On repos I buy I assume the boiler wont work so I dont feel shortchanged when it doesnt . I cant test it beforehand as the systems are disconnected. I treat it as a bonus then if it does fire up.

    I learnt the hard way as well. What looked like a brand new boiler was installed and looked clean and new. I discovered later it was an obselete model and no parts could be found for it. Always test the boiler where you can before exchange. It forms a vital part of the MOT of the house. As a layman I can see a kitchen that is falling apart and i can see ripped stained carpets. But ask me to look inside a boiler and give an opinion as to whether it is fit for purpose my mind goes mush. Spend £45 on getting a boiler safety cert done before signing and it can save expensive headaches afterwards

    So best put it behind you and find another property.
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    Jonathan Clarke. http://www.buytoletmk.com

    Ditto everything above from Jonathan.

    One additional point is that if your finances are so tight that a boiler issue like this would cause you an issue then maybe you need to re-evaluate the property price you are aiming for and you should spend more time on PT, attending networking meetings and reading books on property.

    One of the keys to being a successful investor "often missing or diminished in books and certainly the GRQ courses" is to have sufficient funds beyond the deposits to cope with the bumps in the road that you might face.

    Supposing the property had a boiler and it failed and wasn't repairable within 3 months, what then? What if the tenant stopped paying the rent and it took you 6 months to get them out?...

    Try to think of it as what happened was actually a good thing, you've learnt a lesson about not trusting what people say they are going to do before selling and you've been saved from a financially challenging place as there was something that you couldn't foresee once you owned the property and you had no additional funds to cover it.

    Forget the "can I sue" mindset (in this case it's probably an exercise in futility) and take the opportunity to re-evaluate what you are trying to accomplish and how you can purchase a property and not have it control you through constant worry about something going wrong because you won't be able to afford to remedy it.

    Have a deposit available and funds to cover potential issues otherwise you may end up in a whole world of pain. After all you are going into business, think like a business person you respect if you want to stay in business for the long term.

    Expect the unexpected and if nothing untoward happens, you are quids in, if it does you are prepared...

    All the best in your property investment and landlord journey. You are braver than most in that you got "in the game" don't let this set back put you off, it's after all, probably a very valuable lesson.
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