“Oh what a woollen web we weave…”

In property transactions, buyers typically submit pre-contract enquiries to gain essential information about the property or land prior to contract (e.g. to purchase or lease land or property).

These enquiries cover various aspects, for example querying whether third parties have rights over the land in question.

While sellers are not legally obliged under common law to answer these enquiries, the principle of caveat emptor (“let the buyer beware”) places the burden on buyers to conduct due diligence before committing to enter into a contract.

However, caveat emptor has important limitations – there is an overriding duty on sellers to disclose latent defects and not provide information which is misleading or false.

It is also crucial to distinguish between statements of fact or law (which, if false, may constitute misrepresentation) and mere opinions (which generally do not).

Sellers must ensure responses to enquiries are both accurate (reflecting their knowledge of the property) and up-to-date, meaning that if a seller later learns that an earlier statement was incorrect or misleading, they should correct it or withdraw it before the contract is signed.

What is misrepresentation?

If a seller provides false information in response to an enquiry, the buyer may have grounds to claim misrepresentation. To establish misrepresentation, four key elements must be proven:

• There was a statement of fact or law (a representation).
• The buyer relied on the statement when entering the contract.
• The statement was false at the time of contract.
• The buyer suffered a loss as a result.

The available remedies vary depending on the type of misrepresentation but typically include rescission (setting aside the contract and restoring the parties to their pre-contractual positions) and damages (compensation for losses incurred).

A key component to any claim is the demonstration of reliance – the buyer must have genuinely believed and acted upon the false statement when deciding to enter into the contract.

The “Moth Mansion” case – Patarkatsishvili v Woodward-Fisher [2025] EWHC 265

The recent case of Patarkatsishvili v Woodward-Fisher [2025] highlights the serious consequences of misrepresentation in property transactions.

The case involved the sale of a £32.5 million mansion in Notting Hill.

Prior to the sale, in 2012/2013, the seller renovated the property using wool-based insulation to enhance the environmental credentials of the property.

The installation of the insulation led to a moth infestation, which persisted despite pest control efforts by the seller.

In a report given to the seller, pest control specialists confirmed that the infestation could not be eradicated unless the insulation was removed.

When responding to the buyer’s pre-contract enquiries, the seller denied knowledge of any vermin infestation, confirmed that there were no reports concerning vermin infestation and stated that he was not aware of any ‘defects not apparent on inspection’ of the property.

Shortly after moving in, the buyer discovered a severe moth infestation.

Reports described moths contaminating wine glasses, toothbrushes, and clothes, with the buyer resorting to setting up 400 pheromone traps and smoke bombs to combat the issue.

Upon further investigation, the buyer obtained their own pest control reports and pursued legal action against the seller, seeking rescission of the contract and damages on the grounds of fraudulent misrepresentation.

The ruling

The court ruled in favour of the buyers, finding that the seller did not honestly believe his pre-contractual statements and was reckless as to making such statements – thus, he had fraudulently misrepresented.

The fact that the seller knowingly failed to disclose reports which existed confirming the moth infestation meant that he knew or suspected that his replies were untrue.

The court clarified that the term “vermin” included insects, which meant that moths were by their nature capable of infesting a residential house and causing a problem to the occupier – therefore classifiable as vermin.

The court also confirmed that the moth-infested insulation was deemed a material defect and therefore capable of being a ‘defect not apparent on inspection of the property’.

The court awarded substantial damages for the costs incurred by the buyers, and granted the rescission of the original sale contract, a refund of the purchase price (minus an adjustment for time spent living in the property) and reimbursement of Stamp Duty Land Tax and pest eradication costs.

Key considerations

This case serves as a stark reminder of the risks associated with misrepresenting information in pre-contract enquiries in property transactions.

Some key considerations for selling parties (i.e. vendors and landlords) are summarised below:

• Caveat Emptor – While buyers must conduct thorough due diligence, sellers cannot misrepresent facts or conceal latent defects.
• Precision Matters – Sellers should be careful and truthful in their responses to pre-contract enquiries. Reckless misstatements can have severe financial and legal consequences.
• Moths = Vermin – This case clarified that moth infestations qualify as a latent defect, reinforcing the need for full disclosure in similar scenarios.
• Broader commercial implications – misrepresentation principles extend beyond just real estate transactions – other contractual matters involving information disclosures (e.g. corporate transactions) are subject to the same common law principles in respect of representations.

The case of Patarkatsishvili is a cautionary tale for sellers tempted to downplay or disregard issues in pre-contract disclosures.

Misrepresentation can result in rescission, financial penalties, and reputational damage.

Whether dealing with residential or commercial property transactions, buyers and sellers should seek legal advice to understand their rights and obligations fully.

Sharpe Pritchard’s Real Estate team regularly advises buyers, sellers and landlords and tenants across a range of sectors.

If you would like to discuss the information or issues raised in this article in further detail, please contact James Mallery-Nelson (jnelson@sharpepritchard.co.uk) or on 0207 405 4600.

James Mallery-Nelson is an Associate at Sharpe Pritchard LLP.

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any issue raised in this article, please contact us by telephone or email enquiries@sharpepritchard.co.uk.