The fallout over a moth infestation in a multimillion-pound home in London has demonstrated the importance of being honest and accurate when selling property.
Thrings’ residential property expert Estelle Baldry takes a look at the High Court case surrounding the sale of Horbury Villa in Notting Hill and how a lack of disclosing issues to the buyer upended the sale.
What happened?
The early Victorian mansion, worth £32.5million, was sold in 2019 by high-end property developer William Woodward-Fisher to Georgian heiress Iya Patarkatsishvili and her husband Yehven Hunyak, with the couple moving in shortly afterwards.
Not long afterwards, they began to notice that the house was subject to a significant moth infestation, which they claimed originated in the wool insulation used during a renovation by the previous owner.
Despite an attempt to remedy the situation before the sale, Mr Woodward-Fisher had not declared this in any of the buyers enquiries regarding the condition of the property – including specifically asking whether the property had ever been affected by issues such as vermin infestation.
The buyers argued that the responses given were false and had been relied upon by them when proceeding with the purchase and sought to recover the purchase price through rescission of the contract, with the case going to the High Court.
What was the outcome?
Giving judgment, Mr Justice Fancourt ruled in the couple’s favour, finding that Mr. Woodward-Fisher’s replies amounted to fraudulent misrepresentations.
It was found that the seller must have been aware of the previous infestation, despite claiming he was “not aware” of any issues. He also failed to provide the buyers with the reports containing expert finding on the infestation.
While the seller allegedly had not consciously intended to deceive, it was found that he was reckless in assuming the issue had been resolved and therefore did not disclose.
The judge also found that moths constituted "vermin" for the purposes of pre-contract enquiries, confirming that an infestation can amount to a hidden defect in a property.
Following the court’s decision, Mr Woodward-Fisher was ordered to financially compensate the buyers, refunding the £32.5million purchase price, minus deductions for their five years in occupation, as well as paying £4.7million in interest on the refund, £5.1million in damages and legal costs of up to £2.9million.
Why this matters
This case underlines why any omission or inaccuracy in responding to enquiries could amount to misrepresentation, which could invalidate the sale even after it has completed.
Any attempt to omit or downplay relevant information or be untruthful in pre-contract enquiries, including the likes of hidden infestations and concealed, defects could result the seller having to pay back the purchase price and facing substantial financial damages.
Buyers, meanwhile, seeking rescission over a potential misrepresentation issue, should look to act promptly. Whilst the seven-and-a-half month delay was not enough to defeat this claim, putting it off any longer could potentially impact the outcome.
In both cases, whether you are buying or selling a property, it is vital to obtain legal advice early on in the process to ensure that the right questions are being asked, and that accurate responses are being given.
Thrings’ Residential Property lawyers are skilled at navigating the rarely straightforward processes that are buying and selling and offer professional, open and tailored advice that gives you confidence in making the right decision for you. To find out more about how they can bring clarity to your dealing with the property market, please get in contact.
