Buyers pay price of stamp duty holiday rush as Japanese knotweed claims rise
Legal claims against property sellers relating to Japanese knotweed have risen sharply over the last twelve months, in part due to buyers and sellers rushing transactions through to benefit from stamp duty holiday savings, reports Environet UK.
Research in partnership with CEL Solicitors, a law firm specialising in Japanese knotweed-related claims, has revealed a 25% year on year increase in misrepresentation cases, which arise when a seller has failed to declare the presence of Japanese knotweed on their property and the buyer has discovered it after the sale has completed.
The Law Society’s TA6 form, completed as part of the conveyancing process, requires sellers to state whether the property is “affected” by Japanese knotweed. A seller needs to be certain that no knotweed rhizome is present, including beneath the ground and within three metres of the boundary, in order to respond “No” to the Japanese knotweed question.
Yet a proportion of sellers declare their property to be knotweed-free without carrying out the appropriate checks – only to find themselves on the end of an unpleasant and costly misrepresentation claim when the plant is later discovered. Buyers can usually claim for the cost of treatment and the resulting diminution in the value of the property, with the latter making up by far the largest cost due to the fact that knotweed can knock up to 10% off the value of a home.
Data from HMRC shows that property transactions hit 213,120 in June 2021 – a year on year increase of 216% compared to June 2020 – as the property market surged post-lockdown, driven in part by the stamp duty holiday. This increase in transactions alone has prompted a rise in misrepresentation claims, yet the pressure to complete in time may also have encouraged sellers to skip the necessary checks and declare their property knotweed-free – and tempted buyers to cut corners rather than commission a Japanese knotweed survey.
Detection dogs have been trained by Environet to sniff out the unique scent of knotweed rhizome beneath the ground – the only way of knowing with a high level of certainty whether or not a property is affected.
Nic Seal, Founder and MD of Environet, said:
“From conversations with panicked buyers and sellers in the run up to the stamp duty holiday deadline in June, I’m not surprised we’re seeing a rise in misrepresentation claims. Japanese knotweed checks are an important part of the conveyancing process and in the rush to complete, worsened by delays in the conveyancing process, it was tempting to just hope for the best rather than commission an additional survey.
“For buyers who now find themselves in possession of a property they may have paid less for or not have bought at all if they’d had all the facts, it can be a worrying time. But by treating the infestation professionally and securing an insurance-backed guarantee for the work, it is possible in most cases to restore the value of the property to close to its original value – as the so-called ‘knotweed stigma’ can still have some impact.”
Mark Montaldo, director at national law firm CEL Solicitors, said:
“Sellers have a legal obligation to declare the presence of Japanese knotweed on their own or neighbouring properties and if they try to conceal the plant it can be a very costly mistake.
“Defending a misrepresentation claim can be difficult, as even if Japanese knotweed doesn’t reappear until after the sale completes, a professional can still determine exactly how old the knotweed is and therefore the seller can be left with a hefty financial claim if it’s discovered it was present at the property prior to the sale.
“The best course of action for sellers is always to treat the knotweed professionally as soon as possible and declare its presence to avoid any problems further down the line. Remember that even if the knotweed was treated professionally years beforehand, there is still a legal requirement to disclose it.”
John Collins and his wife Jane bought a new build home in East Molesey, Surrey in 2016. The developer who built the property had answered “No” to the Japanese knotweed question on the TA6 form, completed by sellers, but in spring 2017 the gardener noticed a plant that looked suspiciously like knotweed growing in the walled garden adjacent to the pool house. This was identified by Environet as being Japanese knotweed and further investigations confirmed that due to its maturity, the plant would certainly have been present at the time of sale. Japanese knotweed cuttings were also found on site, indicating that the seller had tried to conceal its presence.
The Collins’ were covered for legal fees under their home insurance policy, so they appointed a solicitor, Charles Lyndon, to pursue a legal case for misrepresentation. In the autumn of 2020 they won their case and were awarded several thousands of pounds in compensation for diminution in the value of their property.
“Japanese knotweed can have a big impact on a property’s value and be difficult to get rid of, so we were initially shocked and worried when it was discovered in the garden of our new home. We were fortunate that our home insurance was willing to cover us for pursuing a legal claim and, although it was a long process, in the end we achieved a favourable result. With expert help, it’s relatively easy to prove how long knotweed has been there, so I’d encourage anyone in a similar position to go down the legal route and try to recover the lost value of their home. The Japanese knotweed question is part of the conveyancing process for a reason and dishonest sellers need to be held accountable.”
Kindly shared by Environet UK