Disclosing defects in title—how far must vendors go? (SPS Groundworks v Mahil)

Article summary

Property Disputes analysis: Land was sold at an auction. An associated overage liability was not mentioned in the catalogue or at the auction. It was, however, apparent from a copy of the title in a legal pack available to bidders. The sale did not complete because the purchaser discovered about the overage just after the auction. The issue was whether the vendor had failed to disclose a defect in title which entitled the purchaser to rescind the contract. The appeal judge held that the vendor had indeed breached its duty to disclose defects in title. Including the information in the legal pack was not good enough. Thus, the purchaser could rescind. The case raises important questions as to how far vendors must go to disclose defects on title. It raises the possibility that a transparent ‘cards on the table’ approach, involving revealing all adverse rights, covenants etc affecting land, may be required if vendors are to comply with their...