Woman in England must repay $300,000 after selling 'unsaleable' sewage-hit home for $1 million

A woman in England who sold a sewage-damaged home she had claimed was "unsaleable" was ordered to repay £225,000 ($299,160) in compensation.

Thames Water agreed to the payout more than a month after the property had sold for £780,000 ($1,037,010).

Here's what to know

Karen Imber, a 68-year-old homeowner in Woodford Green, Essex, reached the settlement with Thames Water on Sept. 6, 2023, according to The Independent. The company was unaware that the property had already been sold when it issued the payment.

Imber exchanged contracts Aug. 2, 2023, and the sale was completed Aug. 3, 2023. Thames Water later brought a fraudulent misrepresentation claim, seeking to overturn the settlement and recover its payment.

Deputy Master Alexandra Marzec granted Thames Water summary judgment at the High Court, ruling that Imber had no realistic prospect of defending the claim, The Independent reported.

Imber argued that she had told the mediator about the purchase offer and believed Thames Water had been informed. She also said she thought she had no further obligation to disclose anything.

More background

Thames Water paid Imber £500,000 ($664,750) after sewage flooded her Warley Road home in 2006 and 2007, per The Independent. Those were the first of three floods from 2006 to 2014 that led to the dispute.

Imber brought another claim after the third flood. Her expert believed the home's history meant there would be "no willing buyer," though he valued it at £817,000 ($1,086,365) on the assumption that no flooding had occurred.

Imber's demands during the 2023 mediation included £144,000 ($191,405) for increased insurance premiums, distress, and inconvenience, The Independent noted. She also claimed that the flooding had wiped out the home's value.

What's being done?

Thames Water Utilities can pursue damages for the misrepresentation as well as recover the £225,000 under Marzec's ruling. 

The judge rescinded the settlement agreement and ordered Imber to return the payment. A separate hearing will determine the damages amount if the company decides to pursue them, according to The Independent.

Thames Water's barrister, James Davies, argued that describing the house as unsaleable implied that it had not been sold and had no prospect of selling. He said that representation continued throughout negotiations, creating a duty to correct it when circumstances changed.

Marzec agreed that the completed sale fundamentally changed the basis of Imber's claim. By Aug. 3, 2023, Imber knew the property had sold and that she would be moving out, The Independent reported. Even so, negotiations continued without her correcting the central premise presented to Thames Water.

"In my judgment, ordinary decent people would plainly regard it as dishonest to continue to pursue and to settle a legal claim based on the contention that a property was unsaleable after the property had in fact been sold, without informing the opposing party of that fact," Marzec said, per The Independent.

"They would do so even if they knew that the defendant had previously disclosed an accepted offer, or that she did not appreciate that lawyers would regard her mediation statement as containing continuing representations. Ordinary people would regard the completed sale as destroying the central basis on which the claim for diminution of value had been advanced."

Where can I learn more?

Sewage problems can leave homeowners with repair bills and make their homes harder to sell. 

• A U.K. buyer's rural dream home had a mystery sewage system that could have deterred lenders.

• A couple in Ireland said raw sewage made their home uninhabitable and sought court intervention.

• In Scotland, homeowners said rain brings raw sewage toward their homes, with relief years away.

• A U.K. buyer faces a potential £10,000 septic tank fix after decades without emptying.

• A U.K. buyer's £245,000 offer was accepted, but the lender valued the home at £170,000.

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