Legal threat to home-owners

The way is open for thousands of house sellers to be sued for not telling buyers that they have argued with neighbours, solicitors warned yesterday.

Homeowners who do not reveal details about complaintswhen selling could face compensation claims after the case of a 79-year-old widow left facing bankruptcy when she was sued for misrepresentation.

Violet Lamb had not told the purchasers of her home at Portsmouth of two letters of complaint she had written about her neighbour, who repaired cars in his driveway. She now faces bankruptcy after being ordered to pay pounds 30,000 compensation and costs to the couple who bought the house in 1988.

Duncan Johnson,a conveyancing expert for Churchers solicitors, in Fareham, Hampshire, said the case had huge implications. "Almost any dispute, from boundary questions to loud music and, indeed, tinkering with cars, has to be revealed." The basis of the claim against Mrs Lamb was a scheme introduced by the Law Society in 1990 called Transaction, in which vendors filled out a property information form which asks about disputes.

Graham Harris, of the National Association of Estate Agents, said: "This form has proved a nightmare. Very often people approach them in a light- hearted way and are not aware of the consequences." He added: "I think the sentence against Mrs Lamb is very unfair. I cannot believe this was the intention of the Law Society when it introduced the forms."

Mrs Lamb was ordered to pay the couple to whom she sold her four-bedroom house pounds 15,000 costs and pounds 15,000 compensation for loss of money and distress caused. The couple claimed that the noise from next door was intolerable and that they were forced to move out in 1994, selling at a loss.

Robert Sayer, vice-president of the Law Society, said: "There has always been an obligation to answer any questions you are asked accurately and honestly."