A recent High Court decision has sent a clear warning to property sellers: inaccurate or incomplete disclosure can have serious consequences.
The case of Iya Patarkatsishvili and Yevhen Hunyak v William Woodward-Fisher, often called the ‘Moth Case’, involved the sale of a £32.5 million home in Notting Hill. Shortly after moving in, the buyers discovered a severe moth infestation hidden within the property’s insulation, requiring extensive and costly remedial works. They successfully sued the sellers and the court allowed the buyers to rescind the transaction, return the property and recover the purchase price together with substantial damages.
The message from the court was clear: while buyers are expected to inspect a property carefully, sellers cannot rely on the principle of ‘buyer beware’ if they make misleading statements during the transaction.
Caveat emptor explained: why buyer beware isn’t absolute
English property law is often associated with the principle of caveat emptor, meaning “let the buyer beware”. In simple terms, buyers must satisfy themselves about what they are buying. However, this principle has clear limits.
In this case, the seller responded to pre-contract enquiries by stating that there had been no vermin infestation and that he was not aware of any related defects or reports. The court found those statements to be false and, crucially, made knowingly or recklessly.
Because the buyers relied on those statements when deciding to proceed, the court held that the seller had made fraudulent misrepresentations. As a result, the buyers were entitled to rescind the contract, even though several months had passed since completion.
What the court ordered
Although it was impossible to return the parties to their exact positions before the contract, the judge sought to achieve restitution by making appropriate adjustments and allowances.
The buyers were awarded the right to rescind the contract and return the property. They were also entitled to repayment of the purchase price, subject to financial adjustments reflecting their use of the property since 2019. In addition, they recovered approximately £4m in damages, including £3.7m in Stamp Duty Land Tax and £15,000 for clothing ruined by the moths.
This illustrates just how significant the financial consequences of misrepresentation can be for sellers.
Key lessons for property sellers
This case highlights several important points for anyone selling a home:
- Sellers should provide full, honest and precise responses to pre-contract enquiries. If an issue has arisen, it should be disclosed, even if the seller believes it has been resolved
- Problems should not be minimised or reinterpreted to make them appear less serious
- Terms such as “vermin”, “defects” and “reports” may be interpreted broadly. They are not limited to structural issues or formal expert reports
- Informal knowledge matters. If a seller has been told about a problem verbally or has observed it themselves, that information may need to be disclosed.
The court described this as an extreme case, but it serves as a clear warning of the potential outcome where responses to enquiries are found to be false. This judgment does not mean that all sellers must disclose every minor issue. If you’re in any doubt, seek professional guidance.
Lessons for buyers
For buyers, the case offers reassurance as well as a reminder to remain vigilant.
If a buyer believes they were induced into purchasing a property based on false or misleading information, legal remedies may still be available. Replies to enquiries should be read carefully and anything vague, unclear or incomplete should be challenged or pursued further. Where a buyer has a specific concern, such as pests, damp or previous repairs, it should be directly addressed in writing before exchange of contracts.
Ultimately, the Moth Case is a reminder that transparency protects everyone. Sellers who are open reduce the risk of costly disputes and buyers who ask the right questions are better placed to make informed decisions.
If in doubt, disclose and seek advice early.