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The gap between inspection and exchange: Wickens v Cheval Property Developments

01 November 2010

Normally a property is sold in its condition as at the time of exchange.

A recent case examined a situation where fixtures had been stolen between the buyer’s inspection and exchange of contracts and is particularly relevant in these times when properties may be unoccupied for long periods.

What happened?

Mr Wickens agreed to buy the Grade II listed Earle’s Croome Court. He made a close inspection of the house, which was unoccupied, and noted that one fireplace was missing and another was damaged, but that many other original and interesting features remained. The agreed form of the contract provided that the sale included “all fixtures and fittings” and that the property was sold in its state of repair and condition as at exchange. On the day of exchange Mr Wickens was told by the agents that there were reports of a break-in and damage. He did not take up an invitation to reinspect the house. After exchange he discovered that the damage was fairly extensive, making the house uninhabitable.

The question was whether the sale was of the property as it was when Mr Wickens looked round it or as in its state at the time of exchange of contracts.

What did the Court say?

The court held that, in the absence of a fraudulent misrepresentation by the seller or its agent, Mr Wickens was buying the property in the condition as it was at the time of exchange. However, he was given leave to argue that there had been a fraudulent misrepresentation, as there were differing accounts of the crucial conversation with the agents on the day of exchange.

In a previous case, sellers had deliberately removed some flagstones between the buyer’s inspection and exchange of contracts. Not only had the sellers in that case concealed what they had done, but they deliberately lied about it. In that case, the buyer was held to have bought what he had seen, not what was there at exchange. The sellers’ deceit was crucial in finding against them.

What does this mean?

In the present economic climate there will be many properties which stand empty for a long time before being sold and which are vulnerable to thieves and squatters. Buyers may want to make an inspection on the day of exchange to check for damage or, if fixtures are particularly important or valuable, have a list attached to the contract. For sellers, the Earle’s Croome Court case is another example of the importance of maintaining security until the sale goes through.

Source: Wickens v Cheval Property Developments Ltd [2010] EWHC 2249, Taylor v Hamer [2002] EWCA Civ 1130