Case date: 3rd January 2024
The customer complained that the developer gave them incorrect information about the tenure of nearby properties, on the basis of which they completed their purchase. The customer considered that the developer had deliberately misled them and that the value of their property had been adversely impacted.
When the customer complained to the developer, they considered that their concerns were ignored until they wrote to the CEO. They were then directed to the litigation team and felt unsupported throughout the process.
During the reservation process the customer was shown information about the development overall, including the location of properties designated as affordable housing. The customer questioned whether the affordable housing properties near to the plot they were interested in were shared ownership properties and the developer indicated that they were.
Further information was provided to the customer’s conveyancer as part of the pre-contract process and shared by the conveyancer with the customer, which specified the properties near to the customer’s plot as affordable rent. The customer, having raised the tenure of the properties with the developer’s sales team directly, did not pursue the matter further with their legal representative.
Before the sale was completed, the customer raised concerns with the developer that similar properties were being marketed at a lower price, and a price reduction was agreed between the customer and developer reflecting market conditions.
We made some further enquiries to understand what the customer had been told at the point of reservation and the training given to staff around the issue of affordable housing on developments. The developer agreed that incorrect information had been provided, but that it was based on a genuine misunderstanding and was not intended to mislead. Staff had been reminded of the developer’s general policy not to discuss specific issues around tenure of individual plots because these may not be finalised at the time and can be subject to change.
The New Homes Ombudsman upheld the complaint in part on the basis that the customer had been provided with incorrect information in response to a direct enquiry and considered that the developer should apologise to the customer for this. However, looking at the provision of information as a whole from reservation to exchange, the information provided to the conveyancer met the requirements of the Code and would have allowed the Customer to make a fully informed decision about their purchase.
The decision also made clear that, although the complaint could be considered from the perspective of mis-selling, the Code specifically excludes claims for loss of property value.
In relation to the handling of the complaint, the New Homes Ombudsman was satisfied that the developer dealt with the complaint appropriately, addressing it locally in the first instance and then escalating it
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