In a residential property transaction, Sønderby Legal represented the buyer of an owner-occupied apartment. The transaction was entered into subject to the usual adviser reservation. Before the transaction was finalised, the seller became aware of certain matters that would entail costs for our client after completion, but did not pass this information on to our client.
It transpired that, after the purchase agreement had been signed but before the transaction was finalised, the basement of the property had been inspected by a surveyor in connection with the renewal of fire insurance, and the surveyor had identified several rotten beams and missing fire-resistant plasterboards.
In addition, on the same day that the surveyor inspected the property, the chair of the owners’ association in an internal Facebook post pointed out that in the specific apartment there were issues that the previous owner had not had remedied. Inside the apartment there were serious fire-safety defects relating to the cooker hood’s extractor. The extractor vented onto the fire escape, which was why both the chair and the surveyor were able to see it. This was a material matter that the seller, acting loyally, ought to have disclosed in connection with the transaction. The dispute ended up before the City Court. Our submissions were that the seller had clearly breached their duty of disclosure (duty to provide information) and had thereby incurred liability in damages towards our client. Later, when the case reached the High Court, the seller requested a supplementary inspection and expert report and was confirmed by the expert that the costs relating to the basement constituted a 100% improvement. However, the High Court accepted our submissions that the condition of the basement had no significance for the market value of the apartment, whereas the prospect of a substantial expense would have had significance for our client.
During the proceedings, our client was awarded damages for the defective solution relating to the extractor and for the cost of the remedial works in the basement.
