How are we to interpret questions included in the seller’s property information form?

Buyers usually ask sellers to complete a seller’s property information form before purchasing a residential property. The form includes questions designed to elicit whether the seller has sent or received any notices or correspondence, or had any negotiations or discussions with any neighbour or any local or other authority, which would affect either the property itself or a property nearby. Thorp v Abbotts [2015] EWHC 2142 (Ch); [2015] PLSCS 235 concerned information provided by the seller on a previous version of the form, which included these same questions (but did not then seek any information relating to the effects on properties nearby). The judge stated that the questions on the form are to be interpreted in the way that an ordinary layperson would understand them, without needing expert advice before replying. Importantly, one must apply an objective test, as opposed to making a subjective assessment, when considering what is, or was, relevant. Therefore, the court must ask whether a reasonable person, with the seller’s knowledge of the facts, would consider that the property was affected at the time when the replies were given. “Affecting the property” means that the property itself, or the use or enjoyment of it, must be affected. A possible effect on the value or desirability of the property will not be enough. However, the effect need not be a direct physical interference. A material increase in noise or smell, or an adverse effect on the view, could potentially “affect” property. The judge added that the requirement to disclose notices or communications that affect the property applies to those that indicate a sufficient degree of likelihood that an event will happen. It would not be reasonable to expect a seller to disclose nebulous possibilities, such as local or individual gossip or opinions, or conjectures that may never be acted on. Furthermore, the notice or communication must originate from someone who is proposing to take some action (for example from a householder who writes to a neighbour informing him that he intends to apply for planning permission for an extension), or from some regulatory body responsible for authorising or permitting that action, but not from other persons. The judge ruled that the reference to “negotiations or discussions” with neighbours or local or other authorities is aimed at circumstances in which there is some proposal or intention to do something that would affect the property. In addition, the negotiations or discussions must be with either the person whose proposal or intention it is, or with an authority in a position to authorise or permit it to happen. A discussion of some possible future event with a person who cannot make it happen or allow it will not “affect” the property since the outcome of the discussion will have no bearing on what might happen. So, if a seller feared that neighbour A was planning an extension, a discussion with neighbour A about his intentions would be potentially relevant. However, a conversation with neighbour B would not. On this basis, and on the facts of this particular case, there was no claim to answer. The decision provides useful guidance for practitioners, although it is important to remember that the ambit of the current version of the seller’s property information form is now wider, because it includes questions about properties nearby.   Allyson Colby is a property law consultant