What is “Misrepresentation” Within the Context of Real Estate?
Misrepresentation can be defined as a false statement of fact, or the withholding of material fact affecting the purchase of your property.
In common law, an agent’s statement must have been what the buyer or seller relied on to make his purchase – therefore to prove Misrepresentation, it must be demonstrated that he or she would not have made the purchase if not for the agent’s Misrepresentation.
Essentially if you rely on an agent’s false statement to your own financial detriment, when the agent was supposed to have made the statement in good faith, then you have suffered Misrepresentation.
Misrepresentation can be a false fact, but can also be the mere absence of fact as well. These circumstances are known as misrepresentation by omission. For example, a material fact that would have affected your decision in the purchase of a property.
Sometimes a lie can be a matter of degree – for example being told a leasehold has 80 years remaining, when in actuality it is only 75. Misrepresentation is also a common form of cheating. There are many forms of misrepresentation, which includes:
Claiming to be a REN or agent when he is not is Identity Fraud, or the act of illegally masquerading as somebody else.
Lying or omission about whether a property is leasehold or freehold.
Lying or omission about the length of leasehold years remaining.
Lying or omission about clear view when in actual fact a building is coming right in front of the view.
Withholding information when selling land that there is a compulsory land acquisition.
Lying or omission about termite infection, fires or suicides or even leaking roofs.
Giving low property values when in actual fact the value is higher.
What You Can Do
Check that you have a legally registered agent who can be held accountable by law for any representations and assertions that he or she makes in the course of dealing.
Always ask whether the agent has verified the information by examining a copy of the title deed.
Ask for building plans to verify land area and especially built up areas.