House bought on false information: Can I get my money back?

The answer is “yes”, in certain circumstances!

Such a remedy is known as “rescinding the contract”, or “rescission”. If rescission is not available to you, you may still be entitled to compensation for your losses.

To be entitled to rescission and/ or compensation, the answer to the following three questions must all be “yes”.

• Did the sellers make an untrue statement to you, or to agents acting on your behalf?
  
• Did the untrue statement (known in law as a “misrepresentation”) induce you to buy the property? If you would have bought the property on the same terms even if the misrepresentation had not been made, you are not entitled to a remedy.

• Have you suffered loss because of buying the property? For example, have you had to pay for remedial works, or have some of your belongings been damaged, or have you suffered distress, inconvenience and loss of use and enjoyment of the house?

To be entitled to rescission, the following factors are also relevant.

• What communications (if any) have you had with the sellers since discovering that the sellers gave you false information? If you have informed them that you intend to keep the house, you may not be entitled to rescind the contract. 
  
• How much time has passed since you discovered that the sellers have given you false information? The longer the delay, the greater the risk that you will not be entitled to rescind the contract. 

• Can practical justice be achieved for both you and the sellers, by allowing you to return the property? If practical justice cannot be achieved, you will not be entitled to rescind the contract. Although parties cannot generally be restored to their precise positions prior to the contract, practical justice may still be achieved by adjustments. In many cases, the main adjustment will be an allowance for the purchaser’s ownership and ability to use the house since the date that they purchased it. Expert valuation evidence may be necessary when calculating the allowance.

In the rest of this article, we discuss a case in which the High Court held that the purchasers were entitled to rescission. Judgment was handed down on 10 February 2025.

Iya Patarkatsishvili, Yevhen Hunyak v William Woodward-Fisher [2025] EWHC 265 (Ch), 2025 WL 00447776

This case has attracted significant media attention, for good reason. The facts are colourful!

After purchasing a Victorian mansion for £32.5 million in 2019, the purchasers (Ms Patarkatsishvili and Dr Hunyak) discovered an infestation of moths. In the pre-contract enquiries, the seller (Mr Woodward-Fisher) had said that the property had never been affected by a vermin infestation. At trial, an expert witness on entomology gave convincing evidence that the property must have had a severe moth infestation for several years prior to 2020. Mr Woodward-Fisher tried to argue that moths were not “vermin”, however the judge rejected this argument. The judge pointed out that there are definitions within the Complete Oxford English Dictionary and other dictionaries that include insects within the word “vermin”.

The court decided that practical justice could be achieved in the following way, and that therefore the purchasers were entitled to rescind the contract:

• Ms Patarkatsishvili and Dr Hunyak would transfer the property back to Mr Woodward-Fisher.
• Mr Woodward-Fisher would carry out what further works are realistically necessary to address any reasonable concern about moth infestations.
• Mr Woodward-Fisher would sell the property on the open market.
• Mr Woodward-Fisher would repay the purchase price and interest to Ms Patarkatsishvili and Dr Hunyak, less the appropriate allowance for the benefits that the 2019 house purchase had conferred. The principal benefit was ownership and use of the property for the period following purchase. The expert valuers agreed that the value of that benefit has been £21,000 per week (£1,092,000 per year) during the Claimants’ occupation of the house. The court ordered that from the £32.5 million repayable by Mr Woodward-Fisher, there would be deducted a sum calculated at the rate of £1,092,000 per year for the entirety of the period since the property was purchased in 2019.
  
  

In addition to rescinding the contract, Ms Patarkatsishvili and Dr Hunyak were entitled to compensation for their losses. These losses included:

• Stamp duty land tax, removal costs and legal costs connected with the purchase of the property.
• Cost of remedial works.
• Damage to clothes.
• Loss of enjoyment of the property due to the moth infestation and the remedial works.

The Birketts view

If you have bought a property, and you believe the sellers have given you false information, you should obtain legal advice as soon as possible. By your actions/ inactions, you could inadvertently lose the right to rescind the contract and recover the purchase price.

We can also advise you on how best to maximise your claim for compensation.

Contact Birketts today to discuss your case – we’d be delighted to assist you.