Niklas ZennstromAP Photo/Douglas C. Pizac

Niklas Zennstrom, the 46-year-old co-founder of Skype, has lost a court fight for compensation against a couple who had built their dream home, and then sold it to him for £1.1 million back in 2009.

The property was such a disaster that he was forced to knock it down and start again, but the court ruled he should receive no compensation from the couple.


The case

The Swedish businessman bought the Bauhaus-style property on the Crowsport estate in Hampshire in 2009. However, on closer inspection he discovered that the property wasn't safe, and had to be torn down and built again.

According to the Daily Telegraph, when he discovered that it was structurally unsound he sued former owners, Deborah Wilks and Helen Moseley, under the Defective Premises Act 1972, claiming that they were property developers who had ripped him off, and that the property was unfit for human habitation. A key part of this legislation is that it is intended to be applied to property professionals.

Failed

However, the High Court ruled that this wasn't the case. They were just a hypnotherapist and gym instructor who had tried to build their own dream home, and didn't realise there was anything wrong with the property. In fact they had planned to live there forever but had fallen out with a neighbour and had problems with their mortgage.

According to the BBC, Mr Justice Edwards-Stuart said in his judgement "The evidence points overwhelmingly, in my view, to the conclusion that they built it as their dream home as they have always contended." He ruled that they were not operating as commercial property developers, and were ignorant about construction.

The couple released a statement, saying: "From start to finish, the case was a relentless battle. It was a thoroughly awful experience that we would not wish on anyone. Whilst relieved this claim has finally come to a successful conclusion...we are both physically and mentally drained by the whole ordeal."

Zennstrom, who is said to be worth £600 million after selling Skype to Microsoft, will continue separate cases against the architect, builder and structural engineer. He has since rebuilt the property.

Are you at risk?

In this instance the sellers were ruled not to be to blame, but it's a useful reminder how important it is to be completely honest when selling a property.

When you move out, you have to complete a form listing any major problems, including things like problems with neighbours and planning blights. You may also have to answer specific questions from their lawyer. These are contractual documents, so you can be held to them in a court of law.

You may be tempted to hide your ongoing row with your neighbour over their fondness for dance music, or the field behind the house that is set to become a caravan park, but even if these things don't come out in the sale, they can still come after you once the purchase has gone through.

There are plenty of examples of where owners thought they had got rid of a troubled property, only to be hit with a legal battle for compensation after the sale. These are not always easy to prove, but where they are you could be hit with a bill for compensation that's equal to the fall in the value of the property when the issues are taken into account.


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