What Does “Caveat Emptor” Mean?
In property law, the principle of “caveat emptor,” or “let the buyer beware,” is often a point of confusion. This general principle means that the buyer alone is responsible for ensuring that the house they are purchasing is suitable for them and is in good condition. However, many misconceptions surround this principle, especially in the modern conveyancing process.
Is Caveat Emptor Absolute?
While caveat emptor is still relevant, it’s not absolute. Sellers are legally required to disclose certain information, especially through documents like the Property Information Form & Leasehold Property Information Form, even though there is no formal requirement to do so. The conveyancing process is about negotiation and buyers can request further details if needed.
Is the System Unfair to Buyers?
Critics argue that this system is unfair as buyers can often incur significant costs before discovering issues. However, it is important to remember that, in practice, being “subject to contract” means that the buyers have the option to walk away before exchanging contracts, providing them with the ultimate remedy. Furthermore, buyers can negotiate for more information, even though this is not the standard approach.
Are Property Transactions Different from Other Markets?
It is also important to note that many property transactions are not between a “consumer” and a “trader,” as is typical in other markets. Most property sales are private, meaning sellers might not be in a position to provide the extensive details some buyers expect, and imposing too much disclosure could lead to misunderstandings or legal liability for the seller.
Striking the Right Balance
Ultimately, the key is finding a balance between due diligence, cost, and experience. Buyers should assess the information they need with the guidance of legal and property professionals.
Furthermore, each buyer will have a different view as to what level of diligence is appropriate given the time and cost implications. For example, according to RICS, only a quarter of home buyers choose to instruct an independent survey.
If you’re buying or selling property, always seek professional advice to ensure you’re making informed decisions in line with your personal requirements.
