Although buyers of commercial property are responsible for carrying out all the due diligence required prior to purchase, sellers too need to be aware that they can be under a duty to disclose defects and to be aware of the consequences if they do not.
In all ‘arm’s length’ property transactions buyers are advised, and often employ specialists, to identify as much information about the property as they can. This is often done by searches; investigations and the use of CPSE’s (Commercial Property Standard Enquiries) are often use as a tool to tease out those issues.
If the property is sold with Full Title Guarantee it will be implied that ‘the property is free from all incumbrances except those that the landlord does not and could not reasonably be expected to know about’.
Therefore the seller must disclose latent defects or irremediable latent incumbrances on title. (a latent incumbrance is a deficiency in the seller’s title affecting ownership or the right to deal with the property).
At RPS we recommend that sellers of commercial property plan for the sale of their property well in advance and to prepare a ‘clean’ property both in appearance and documentation if delays in sale or future claims are to be avoided. Contact any of the RPS team if you require further advice.
Reference; ‘Caveat Emptor’ EG 19/11/2011
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