New Property Information Questionnaire (PIQ)

Home Information Packs (HIPs) from 6 April include a new Property Information Questionnaire (PIQ) completed by the Seller. The government states the information required 'is easy to complete without professional help and gives buyers basic information to help inform their decision to view or make an offer'. Property professionals protested to no avail against the inclusion of such information without legal assistance. Sellers and agents now deal with resignation, with yet another administrative burden which must be overcome before a property can be marketed. But are the objections to the form an over reaction?

The background to this is the principle of 'caveat emptor', that is, 'let the buyer beware'. It is a fundamental principle of English Law that it is for the buyer to make investigation and enquiry, and there is no duty on the seller to proffer or disclose. Sellers used to provide no information at all, but in recent years a protocol was introduced by the Law Society whereby sellers completed specially designed information forms to be submitted with the contract and title, to speed up the process. The government intended these forms to be in HIPs from the start. The Law Society however asserted its copyright, and quite correctly made the point that these were designed for sellers to complete with the benefit of advice from the legal representatives.

The forms have been through some changes over the years, and show the problems of balancing the interests of seller and buyer, and the potential for liability. Questions which may seem innocent enough to a seller or a buyer are fraught with danger from a conveyancers point of view. The seller has a duty to reply to questions honestly, but how far can a buyer rely on the replies and how far must the seller go when providing these replies? Is the reply given one of fact, or is it the sellers opinion, and if so, how subjective is that opinion? If the seller reply is 'not so far as they are aware' does this just relate to their actual knowledge or can the buyer say they expected them to have made enquiry or checked this? Is the reply a 'representation' or 'warranty' that is binding on the seller? So, to take a simple question 'Is the central heating in good working order?' The seller may say 'yes', as this is their opinion, or current experience. But will the sellers' reply be construed as saying they have the knowledge and qualifications to say this? Or that they have had it checked by a qualified engineer before giving the reply? Or that they therefore promise the buyer that the boiler is fit for purpose and not subject to any defects which may occur later or may become evident after completion? Is the buyer able to rely on this and therefore absolved from any independent enquiry?

Sellers are of course anxious if there are known potential issues, but in most cases careful handling and early disclosure can prevent sales being endangered. On rare occasions it may however be difficult to draw the line. A case recently reported in the National press illustrates this. According to the news report, Miss Sophie Duffy bought in 2004 and on the Sellers Information Form the Seller replied that she did not know of any dispute with the neighbours. When Miss Duffy moved in the neighbour then proceeded to make her life 'a living nightmare' banging on walls and shouting obscenities. Miss Duffy lost the case despite the fact that the Seller admitted in Court that she had reported the neighbour to the police twice and had been concerned for her own safety. The Judge decided that the question on the form dealt with current disputes and that as the seller's dispute was in the past she not therefore obliged to disclose this. Another case reported in 2004 related to whether or not the sellers were obliged to disclose to the buyer on their sale in 2000 that they knew a particularly grizzly murder had taken place there in the mid 1980s. They were advised they did not have to disclose these facts and the buyers lost their case. Both cases turned on the wording of the questions in the Sellers Property Information forms current at that time, but the same applies to any questions which are asked of a seller, and great care must be exercised. In both cases the Sellers may have won, but no one wishes to risk having such a claim brought against them, and the 'murder house' case went to the Court of Appeal.

Fortunately such cases are rare, and conveyancers for either parties can only do so much, if seller/buyers to ever move house and not just disappear under a deluge of unnecessary questions. Indeed much information is in the public domain already whether via 'google', accessing planning records on the local authority's website, or simply by engaging with the neighbours. One client literally staked out the house he had offered on for about 2 weeks before exchanging to check out activities near it at different times of day. These may be going too far for most people, but certainly chatting with the neighbours in both the 'nightmare neighbour' and 'murder house' cases above could have prevented much heartache and wasted litigation.

So the issues of information between seller and buyer are not always as simple as they may seem. How does that leave the PIQ? The questions in this are fairly factual, and a seller can always resort to the 'don't know' option. It is however not without potential for problems. For example, one section relates to changes to the property and consents obtained. From experience, sellers sometimes confuse the consents they have obtained, which could inadvertently mislead a buyer. If in doubt advice should be sought. Does the form help the buyer though? The anecdotal evidence is that buyers have shown no interest in looking at HIPs before they make an offer, so, ultimately, probably not.