Caveat emptor Flashcards
What does ‘Caveat Emptor’ imply?
The buyer takes the property as they find it - the seller is not obligated to provide all relevant information to the buyer.
What is the seller’s obligation under ‘Caveat Emptor’?
The seller is generally under no obligation to give the buyer all the relevant information that they buyer may require.
What is the role of the buyer’s solicitor in a property transaction?
The buyer’s solicitor has to investigate as thoroughly as possible.
What are the exceptions to the principle of caveat emptor?
- Misrepresentations
- Latent encumbrances
- Title defects
From where can misrepresentations arise?
They can arise from:
* particulars of sale
* comments by seller
* communication from seller
Does the seller concealing physical defects count as misrepresentation?
Yes - a misrepresentation is a false statement which induces a buyer to contract to buy
What legal remedies exist for misrepresentation?
Common law remedies under Misrepresentation Act.
Does the buyer need to prove inducement under the SCS?
No, SCS do not require buyer to prove inducement.
What is a latent encumbrance?
Something which is not apparent or cannot be discovered when inspecting the property.
What is the seller’s duty regarding latent encumbrances?
Seller under duty to disclose LEs of which it is aware or of which it has the means to know acting reasonably and diligently.
What is a title defect?
A matter that brings into question the seller’s ownership of the property or the rights and burdens that affect the property.
What can a buyer do up until the exchange of property?
The buyer can walk away without liability.
