Surveyors Negligence

Published on 10 November 2010 by ian in blog


Surveyors Negligence

Liverpool Solicitors Armstrongs specialise in professional negligence claims and writes as to a recent case as to Surveyors and Valuers Negligence.

We are able to  advise you on surveyors negligence claims and any complaints you have against surveyors and valuers and complaints against solicitors. If you have purchased an investment property then this recent case may be of interest. The number of claims against surveyors and valuers and claims in negligence against all professionals has increased as the recession bites and with the effect in the drop in the housing market.

The High Court at the beginning of October gave a second Judgment in the case of Scullion v Bank of Scotland Plc (2010). The Claimant bought a residential investment property.

The property was  bought with a mortgage and  was purchased in 2002 for the sum of £299,800.

The Claimant was to let the property out and use the rental to pay the mortgage and outgoings and in due course hopefully make a profit from the investment.

The valuer was instructed to value the property.  He  valued the property  at £352,950 with an estimate by the valuer of rental income from the property of £2,000 per calendar month.

The Claimant made his best efforts to let out the property but was only able to obtain the sum of £1,050 per calendar month.

Unable to sustain the investment the Claimant put the property on the market and it was eventually sold in May 2006 for the sum of £270,000.

The Claimant sought damages from the Defendant for the inaccurate valuation of the property and the inaccurate rental valuation.

The Court found that a duty of care was owed to the Claimant by the valuers in tort.   That the valuers had breached that duty in respect of both the capital valuation and the rental valuation.  That the surveyor knew that the Claimant would rely on those valuations as to whether or not he was to purchase the property.

The Claimant sought damages to reflect the fall in the value of the property between the date of purchase in 2002 and the date of sale in 2006 which was due to the decline in the property market as foreseeable by the Defendant that if he relied on accurate valuation then later if forced to sell he would suffer a loss if the market fell.

The Court rejected that argument.  He could not recover damages caused by the deterioration in the property market.  He couldn’t suffer a loss as a result of the market valuation as the price paid was less than it was worth at the time of purchase.

The Judge did find however that the Defendant would have been aware of the importance of the rental value to the Claimant to ensure that the rental income was sufficient to cover the mortgage payments.   He was therefore able to recover his overheads (which included Mortgage Interest payments and general letting expenses) less the rental income he did receive.

Importantly, in circumstances where the Claimant acknowledges his debt to the bank or building society, there were no grounds to reduce the damages payable to the Claimant on the grounds that no such liability existed and that the Claimant could not be compelled to use his damages in a particular way.

The Defendant has now obtained Leave to Appeal on two issues;

1.         Whether the Defendant owed a Duty of Care in tort to the Claimant in which he was considered to be a commercial buy to let purchaser.

2.         Whether the scope of that duty extended to losses as to the alleged negligent rental valuation.

A Court of Appeal hearing will be of considerable interest to the public and market in general.

If you have a claim against a surveyor or valuer any professional negligence claim aginst a solicitor accountant or architect  contact us at Armstrongs professional negligence division on 0151 236 3737 or fill in an enquiry form online.

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