Court orders couple to be refunded for home which turned out to be a warehouse

A judge has ordered a couple to refund €88,000 they received as payment for a Naxxar apartment that had been constructed on a site which only had a permit for a warehouse.

In a decision handed down by the First Hall of the Civil Court on Tuesday, Alfred Scerri and his wife Rita were ordered to reimburse Kenneth Martin Nolan and his wife Teresa the €79,000 price they had stumped up for the property as well as the €9000 that they had paid for its contents in 2007.

The first sign of things being amiss which the couple had received after moving in was receiving a utilities bill that referred to the structure as a warehouse. They had requested the Water Services Corporation to switch the tariff to a residential one.

The issue became a major stumbling block, however, when in 2011 the Nolans had decided to move closer to the coast and had engaged a broker to find a buyer. The broker had noticed the irregularity and asked the couple to obtain a copy of the relevant MEPA permits.

Nolan had contacted Scerri, who had reassured him that everything was in order. But when he made his own inquiries with the authorities, he was told that the structure was only permitted to be used as a warehouse.

The buyer also discovered that the site plan attached to the contract had been altered to remove the reference to the warehouse condition. An architect, appointed by the Nolans, had valued the property at just €20,000.

Saddled with a property that agents could not sell and which had been overpriced by a factor of four, the Nolan couple had filed court proceedings.

Judge Anna Felice found for the plaintiffs, saying the buyer's consent on the contract was nullified by fraud involving the withholding of a material fact.

“...the plaintiffs could never have known or foreseen that the property lacked permission to be used as a residence. The defendants cannot shrug off their malicious intent by saying that the plaintiffs had somehow acquiesced to the illegalities committed by the same defendants [by applying for a residential tariff].”

“It is the opinion of this Court that this constitutes a fraudulent and malicious action on the part of the defendants. They deceived the plaintiffs who certainly would not have bought this property had they been aware of the irregularities.”

Judge Felice ruled the contract as null and ordered the defendants to refund the full €88,516.19 purchase price to the buyers, but refused the request for further damages as these had not been quantified or identified.