Selling a house that has suffered flooding: what’s the legal position on the SPIF?
Over the last couple of years, we have seen a big increase in the number of clients who are having to deal with legal issues arising from the sale or purchase of properties that have suffered flooding. A common scenario arises when a seller is asked to answer questions about the property in a formal document called a Seller’s Property Information Form (SPIF).
The typical wording in the SPIF is straightforward: “Has the property suffered from flooding? If yes, please give details”.
But what is “flooding”? Do one-off incidents have to be reported? Does water have to come into the buildings on the property? Does flooding only include water coming from someone else’s land onto your own? If no damage has been caused, do you need to mention it?
When advising clients in this type of situation, our starting point is always the legal definition of flooding, which is: “the overflowing of water onto land which is normally dry.”
Flooding can be caused by a number of problems, be this drainage, heavy rain, rivers overflowing, tidal surges, water running off a nearby field or even groundwater flooding, where the water table rises and water emerges above the natural surface. If these events cause “the overflowing of water onto land which is normally dry” and this land forms part of the property, then it is arguable that the property has suffered from flooding, even if no buildings are affected. According to the legal definition, flooding occurs more often than you might think.
Does a seller have to tell a purchaser about every incident of flooding? There is not a simple yes/no answer. A seller has no legal duty to tell a purchaser anything about the property and, in theory, could simply leave blank any question in the SPIF that asks about flooding. But in practice, the legal team advising the purchaser is likely to notice the absence of any answer (they could be negligent if they did not but that’s another story). In turn, that would probably lead to the seller’s solicitors insisting that the question is answered and the purchaser’s solicitors advising their client to draw adverse conclusions if it remains unanswered.
When answering questions, it is essential that care is taken not to give a technically accurate but misleading answer. Telling the purchaser about one minor incident of flooding but failing to mention another more serious incident is just as bad as telling an outright lie.
The consequences of providing untrue or misleading information in a SPIF are potentially very significant and could even lead to the purchaser forcing you as a seller to return the purchase money and take the house back.
In conclusion, you should take great care when considering how to answer questions about flooding when selling your property. Ask your solicitor for advice if you are in any doubt about what to do.
Posted on Jul 7th, 2016 by Lyons Davidson