Wednesday, August 27, 2008

CAVEAT EMPTOR!
Information for Buyers

Mistakes can happen

Imagine the following: you are told by your lawyer that you have inherited a piece of land in a village nearby. You did not know that this land was going to become yours, in fact you did not know of its existence. You are given the official plan of the property so off you go to see it. However, because the plan is small and does not show a large enough area to identify the plot accurately, you mistakenly believe a nearby plot is the one belonging to you.  You decide to sell it so you show it to the estate agent and give him the plan. Your co-owner agrees with the sale and accordingly signs the mandate (this authorises the agent to sell the property).

The agent checks the plan against the land itself and sees that it shows a plot which seems to agree with the plan and he assumes the owner knows his property. He takes the photographs and prepares the description of the plot for use on his web site and in his database. Everything has been done in good faith, but of course the real plot is a bit different – the slope is steeper, the entry point a bit more awkward and it is a bit further away from the stream and the village.

The estate agent has a large team working for him who rely on the information entered in the computer database as being accurate. One of his agents shows his clients the plot as identified in the photos and as apparently shown on the plan, supported by the agent’s “For Sale” sign on the roadside. The client makes an offer for the plot he was shown, and this is accepted. 

Nobody has told the agents or the vendors about the misplaced sign. The co-vendors were both under the impression they were talking about the correct plot, but one was always referring to the wrong plot. The agent who showed the plot was acting in good faith on information provided in the normally accurate manner. The buyers also saw the property plan while looking over the plot and did not detect any error themselves.

The Notaire is working from the documents including the plan and the description provided by the agent and the plot number as provided by the land registry. Nothing can suggest to him that there has been any error.

This combination of unlikely coincidences led to the identity mistake, which has certainly never happened to this agent before and must be rare even nationwide. The buyer can check with the map at the Mairie to see if it agrees with the plot on the ground. He can ask the vendors to show him the plot before signing any document (but to what avail if the vendor himself does not know?) and he can ask the agent to double check his information. But sometimes mistakes will happen despite all precautions.

“Caveat emptor” has to be the cruel rule applied here. Certainly there was no dishonesty on the agent’s or vendor’s part, and the mistake was genuine. If the buyers report the mistake immediately it might be possible to annul the sale (if the vendors consent). If the buyers cannot accept the “right” plot, they must initiate legal proceedings to recover whatever may be allowed them by the courts. The agent’s insurance company cannot make any payments without a court judgement. The agent himself is not in a position to rectify the transaction.