12 Dec 19 by Kate Gordon



Do You Have To Declare Neighbour Disputes? What You Need To Know

There are a lot of things that go into trying to sell your home. Not many people realise this until they go through the home selling process themselves.

Understandably, a potential buyer of your house would want to know certain details about not only the home but the neighbourhood as well. They want to ensure the property is safe for their family.

If you’ve had a previous confrontation with a neighbour, you may be wondering do you have to declare neighbour disputes?

The answer has a lot of depth to it. Here is everything you need to know about declaring such things as a previous dispute with your neighbour.

Seller’s Property Information Form

It can be tricky to understand which things need to be reported when you’re attempting to sell your home.

While potential buyers have a right to be aware of any previous disputes, you also have a right to privacy (to an extent). Because of that, it’s hard to know what falls in which category.

One thing that’s definite is that if any law enforcement officials have had to get involved with a previous argument, you have to declare the dispute.

Those that want to purchase your home should be made aware of any unethical or disturbing neighbours in the area.

If this has been a problem you’ve had the displeasure of dealing with, then you’ll need to list it on a document known as the Seller’s Property Information Form. The SPIF is essential, regardless of whether your property is residential or commercial.

While that may sound a bit overwhelming, the form itself is very well laid out and direct.

It covers things such as boundaries information, disputes and complaints, notices, guarantees, previous services, joint repairs between you and your neighbours, etc.

The disputes portion only has two questions on it: 1) if you know of any previous disputes among surrounding neighbours, and 2) if you’ve ever received a complaint. If the answer is “yes” on either, you’ll be required to fill out details.

What Needs To Be Declared?

Unfortunately, “dispute” is a very relative term. Depending on the person you ask, they could view something like you and your neighbour refusing to mow the area between your two properties as a “dispute”. Even if neither side became frustrated.

Neighbourly matters are a fickle thing. That’s why it’s important to list out as much as you possibly can. You wouldn’t want anything rearing its ugly head a few years down the line.

Many home sellers believe that if they can get through finalising the sale on their home without a previous dispute popping up, they’re in the clear. That couldn’t be more false.

The buyer has the right to take action on any unlisted disputes for several years after the sale goes through.

What Doesn’t Need To Be Declared?

In short: any dispute that has been resolved without an official getting involved. However, this can take place in different scenarios.

Maybe you and your neighbour had an issue, such as your fence being a few inches into their property. But you two eventually agreed on a resolution.

Perhaps your neighbour used to have a terrible habit of leaving rubbish in their garden which would eventually blow into yours. But that was years ago and is no longer an issue after you made them aware of it.

In both scenarios, there was once a confrontation but a solution was reached and it won’t be an issue for the next owner of your home. Therefore, you are not required to list them.

Obviously, not all situations are black and white. There are some scenarios that will be a grey area for whether or not they should be declared. Ask your trusted property consultant what they would advise if you’re in doubt.

Guidelines For The SPIF

Now that you’re aware of the Seller’s Property Information Form, there are just a few other points to drive home (no pun intended).

Be sure to fill out the form as much as you possibly can, and with as much detail as you can offer.

There are certain situations in which you do not have to completely fill it out. However, doing so may scare certain prospective homebuyers (and their solicitors) away. Filling it out entirely will give the impression that you’re being as transparent as possible.

Do not attempt to lie or cover up the truth under any circumstance, it can come back to haunt you later on.

You may also feel as if answering the questions on the form generically would be advantageous for you. However, doing so comes off as if you’re avoiding key information on the dispute. If the buyer finds that information elsewhere later on, you’re in trouble.

This process is only as complicated as you make it out to be. If you’re as honest and direct as possible with previous neighbour disputes, then you have nothing to worry about!

Do You Have To Declare Neighbour Disputes? Be Honest and Upfront

As you’ve undoubtedly seen by reading this article, it’s best to be as clear and concise as possible with any previous neighbour disputes.

If you’re still wondering “do you have to declare neighbour disputes?” then work with your property consultant and see what they recommend.

Be sure to read this article on our growing dispute resolution service and how it can help you. It’s never too late to resolve an ongoing dispute with your neighbour before selling.

For more enquiries, please reach out via our contact us page and we’ll be happy to assist you further.

Glossary

of Commercial Property Terms

Alienation – Normally refers to the transfer of a leasehold interest in property to another party – e.g. the grant or assignment of a lease, or the granting of an underlease (or sublease). Most leases will require the Landlord’s consent to such a transfer and their costs in considering the terms of the assignment or underletting to be covered by the Tenant.

Arbitration – A method of settling disputes by reference to an independent and impartial third party, usually an arbitrator is appointed by the RICS. Arbitration is essentially an adjudication of the arguments of the parties, and as such differs from Independent Expert Determination.

Assignee – A party to whom a lease has been assigned or transferred by the existing Tenant (the assignor).

Assignment – Transfer of a lease from one party to another. Once a lease has been assigned, the assignee becomes responsible to the Landlord for paying the rent and fulfilling the other obligations of the lease.

Assignor – The existing Tenant who is transferring their lease to another party (the assignee).

Assured Shorthold Tenancy (AST) – An AST is the usual form of residential letting if: you are a private Tenant with a private Landlord, the tenancy began on or after 15 January 1989 or the house or flat is let as separate accommodation and is your main home.       A tenancy will not be an AST if: the tenancy began before 15 January 1989, it is a business or holiday let, no rent or a very high rent is charged or if the landlord is a ‘resident landlord’ (e.g. they let out a room within their home).

Authorised Guarantee Agreement (AGA) – Often put in place when a Tenant assigns their lease, this requires the Assignor to sign an agreement meaning if the Assignee fails to meet their obligations under the lease (including payment of rent) then the Landlord will be able to pursue the Assignor.

Break Clause – A clause in the lease giving either or both the Landlord and Tenant the right to terminate the lease in specified circumstances, normally at a given date within the lease, such as the third anniversary of the start of the lease. It is important to diarise the dates for the break clause as notice will have to be given to the other party stating that they wish to operate the break at the correct time. Most break clauses are time sensitive in that if the date is missed, the right to exercise the break will be lost. Break clauses are often also subject to certain conditions such as all payments being up to date and the Tenant providing vacant possession.

Consumer Price Index (RPI) – Rent reviews within leases can be linked to CPI which is a measurement of consumer inflation produced by the UK’s Office for National Statistics having regard to the price level of a basket of household goods and services.

Contracting Out – An agreement between the Landlord and Tenant that the Tenant will have no right to renew the lease at the end of the contractual term and will not have any right to compensation for the same purpose. This might also be referred to as ‘outside the act’. Both parties agree that the security of tenure provisions of Part II of the Landlord and Tenant Act 1954 shall not apply.

Covenant – The word generally has two meanings: First, in the strict legal sense it refers to a clause within the lease requiring the Tenant (or Landlord) to do something or to refrain from doing something (see Restrictive Covenant). Second, it is used to denote the worth of a Tenant and hence the risk of default, which will have a bearing on the value of the lease.

Dilapidations – In simple terms they represent the exit costs for the Tenant at the end of the lease term. The cost of putting the property back into its original pre-let condition.

Energy Performance Certificate (EPC) – a commercial EPC provides an energy rating for the building which is based on the potential energy comsumption. Services such as lighting, heating and insulation are taken into account. The EPC is accompanied by a secondary Recommendation Report that provides recommendations on how the energy performance of the building could be improved.

Forfeiture – Forfeiture of a lease occurs when the Landlord exercises their right to regain possession of a property where there is a breach in a condition of the lease, or a breach of covenant.

Gross Development Value (GDV) – The estimated value that a new development or property would sell for on the open market.

Gross Yield – A measure of the return on an investment before the deduction of costs associated with the property purchase.

Heads of Terms (HOTs) – A document usually prepared by the Agent setting out the rental or sale agreement between the parties. The HOTs are sent to the solicitors to prepare the lease or sales contract.

House in Multiple Occupation (HMO) – A property where at least 3 tenants live with shared toilet, bathroom or kitchen facilities.

Independent Expert Determination – A process in which a neutral, independent third-party acts as an expert to provide a confidential and binding determination of a dispute. Different to Arbitration as the Independent Expert is not confined to the evidence presented by the parties.

International Property Measurement Standards (IPMS) – International standards providing buildings of different use classes to be measured on a like for like basis around the world.

ITZA‘In Terms of Zone A’ a method of measuring and valuing shops of different sizes and layouts based on the amount of window frontage.

Market Rent – The estimated amount for which a property should let for on the date of valuation, between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion.

Market Value – The estimated amount for which an asset should sell for on the date of valuation, between a willing buyer and a willing seller, in an arm’s length transaction after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion.

Minimum Energy Efficiency Standards (MEES) – New legislation from 1st April 2018 meaning that all properties with EPCs rated ‘F’ or ‘G’ need to be brought up to an ‘E’ rating or above before they are able to be let.

MRICS – A Member of the Royal Institution of Chartered Surveyors otherwise known as a Chartered Surveyor.

Net Internal Area (NIA) – The usable area within a building measured to the face of the internal finish of party walls and taking each floor into account. Excluding toilets, lift rooms, stair wells, entrance halls and corridors.

Net Initial Yield (NIY) – A measure of the return on an investment, the net yield takes the actual costs associated with purchasing the property into account.

Option to Purchase – An agreement made between a landlord and tenant that gives the tenant the opportunity to purchase the property. The purchase price can either be agreed in the lease or determined by a valuation or valuations at the time of purchase.

Party Wall – A shared property boundary. It can form part of a building or a garden wall. You must advise your neighbour if you want to build on or at the boundary, if you want to work on the existing party wall or structure or if you want to dig below and near to the foundation level of their property. A party wall surveyor is appointed to work on a party wall and acts independently on behalf of the wall.

Per Square Foot (PSF) – Often a rental rate or price will be applied per sq ft (or per sq metre) of space. A method used for valuing properties.

Rent Passing – The current rent that is being paid.

Retail Price Index (RPI) – Rent reviews within leases can be linked to RPI which is a measurement of consumer inflation produced by the UK’s Office for National Statistics.

Royal Institution of Chartered Surveyors (RICS) – The world’s leading professional body for qualifications and standards in land, property, infrastructure and construction.

Security of Tenure – The statutory right of a tenant to renew the lease at the end of the term. Part II of the Landlord and Tenant Act 1954 gives business tenants security of tenure. However, this can be opted out of, see ‘Contracting Out’.

Service Charge – The costs incurred by the Landlord for upkeep and maintenance to shared parts of the building or estate, which can be charged back to Tenants.

Stamp Duty Land Tax (SDLT) – A tax that is paid when purchasing property or land over a certain price in England and Northern Ireland. The current threshold for SDLT is £150,000 for non-residential land and properties. A tax is also paid when leasing a property for 7 or more years.

Subletting – Where the Tenant lets part or all of the premises to a Sub-Tenant, as permitted by the terms of the lease. It differs from assignment in that the head lessee remains responsible to the Landlord for the payment of rent and fulfilment of other obligations.

Vacant Possession (VP) – In terms of a break clause or the end of a lease, Vacant Possession requires the Tenant to ensure the property is empty on the day of completion or the break date.

Valuation Office Agency (VOA) – Business premises are assessed by the VOA for non-domestic rating purposes and each property is given a Rateable Value. Your local council uses the Rateable Value to calculate how much is paid in business rates, called the Rates Payable.