The risks of not disclosing problems when selling a property

A couple has won the right to hand back their £32.5 million moth-infested mansion after the seller gave false answers to property information questions.

A billionaire’s daughter and her husband have been told by the High Court that they can return their property and be refunded after discovering that the seller had hidden a severe moth problem.

Iya Patarkatsishvili and her husband Yevhen Hunyak bought Horbury Villa, a £32.5 million, 11,000 sq ft house in Ladbroke Grove, from property developer William Woodward-Fisher in May 2019. The property included a library, cinema, pool and spa.

Several days after moving in, Ms Patarkatsishvili noticed evidence of the moth infestation. Over time, moths appeared in wine glasses, on toothbrushes and in clothes. A specialist found ‘an infestation of extreme proportions amounting to millions of moths.’ It is believed that they were breeding in the wool insulation throughout the house. The report noted that the issue would have ‘been a problem over years rather than months.’

The couple’s barrister claimed that Mr Woodward-Fisher had known about the infestation but in pre-contract enquiries had stated that he was unaware of any ‘vermin infestation’ or ‘defects’ that were not visible. In fact, he had been advised of the infestation in the insulation in at least two reports provided by pest control companies prior to selling.

The court found his representations to be fraudulent. The judge said that he had been desperate to sell the property and was concerned that disclosing the infestation would cause the transaction to fall through.

Mr Justice Fancourt ordered that the seller should repay the majority of the £32.5 million the couple had paid for the property, less around £6 million to take into account the time that they had lived there.

Ms Patarkatsishvili and Dr Hunyak were also awarded £4 million in damages, including £15,000 for ruined clothes, the costs of remedial work they carried out and the £3.7 million that they paid in Stamp Duty. The court also ordered that interest of £4.7 million be paid on the £26 million refund, as the amount returned to them should be of the same value as in May 2019.

Finally, Mr Woodward-Fisher, having lost the case, was also liable for the couple’s legal bills, estimated to be as much as £2.9 million.

Understanding Pre-Contract Enquiries

When a property is sold, the seller is asked to fill in a standard Property Information Form. It is essential to answer this honestly and accurately. As seen above, failure to do so can be exceptionally costly.

If you need advice on completing the form, known as Form TA6, you should speak to your solicitor.

If you are selling a leasehold property, you will need to fill in an additional form, TA7.

A further form, TA10, should be completed in respect of the fixtures and fittings at the property.

Your solicitor will provide you with these at the start of your transaction. You may need to find additional information to accompany the forms, such as guarantees and planning consents.

Contact us

Whether you are selling a property and need guidance through the conveyancing process, or purchasing a property and have concerns about information revealed during the transaction, obtaining legal advice at an early stage can help protect your interests and prevent costly problems later.

Speak to our experienced Conveyancing Team for practical guidance tailored to your transaction. Contact us today to discuss how we can help.