When is a loft conversion, not a loft conversion?

In the modern world in which we live with farm land becoming more and more valuable it seems that the courts have an endless stream of family cases involving disputes as regards ownership of farms. Yet this was the very issue that the court had to decide in the recent case of Shaw V Shaw [2018] EWHC 3196 (Ch).

When is a loft conversion, not a loft conversion? When it is not fully made up said The Property Ombudsman (“the Ombudsman”) when it investigated a complaint brought by prospective buyers against selling agents in respect of a residential dwelling house.

The would-be buyers told the agents that they were looking to buy a three bedroomed property. The agents showed the potential buyers a property which, although marketed for sale as a three bedroomed property, in fact, comprised two bedrooms with a third bedroom being a loft conversion.

The buyers, believing the property to be a three bedroomed property, made an offer to buy the property.  That offer was accepted and they instructed a surveyor to carry out a survey on the property.  It was only after they had gone to the expense of instructing a surveyor that it came to light that the loft conversion did not have the necessary building regulation certificate (nor could the surveyor confirm that it had been constructed to the right standard in order to obtain one) and so could not be classified as a bedroom.  The buyers, therefore, withdrew from the prospective sale and made a complaint to the Ombudsman.

Under the Consumer Protection from Unfair Trading Regulations 2008 (“the Regulations”), which came into force on 26 May 2008, a commercial practice is unfair if, inter alia, it:

• Contravenes the requirements of professional diligence; and
• Materially distorts the economic behaviour of the average consumer with regard to the product.

The agents were subject to the Regulations. The Ombudsman found that given the obvious building work carried out to the property and the buyers’ specific requirements, the agents should have undertaken further investigation in relation to the same.  They found that the agents were in breach of their obligations under the Regulations and made an award of £1,000 to the prospective buyers to compensation for the cost of the surveyor’s report together with a small amount for the aggravation, distress, and inconvenience caused.

The Regulations provide further specific obligations as regards trading practices which are applicable to agents.  It is no longer acceptable for agents (who are therefore liable in their own right for any breaches of the Regulations) to rely solely on information given to them by prospective sellers – further investigations may be required and it is essential that sufficient procedures are in place to ensure the right questions are asked and that any answers received are fully documented.

In this case, had the agents been able to demonstrate that they had asked suitable questions of the sellers they may have been able to avoid the Ombudsman’s award.