It has been reported that mortgage borrowing in the UK is on the rise and will continue to do so during 2014 as the UK property market continues to grow. A by-product of the increase in the property market is the demand for valuation reports from surveyors.
There are different types of reports consumers can obtain from a simple drive-by valuation to a full structural survey. More often that not the details provided in a surveyors report are relied on by the banks providing mortgages for borrowers. In addition it is likely that consumers who are purchasing properties will rely on the contents of a report to confirm whether the property they are buying has any defects.
Sometimes surveyors can get things wrong and they fail to follow a “trail of suspicion” which may lead them to more serious defects which they ought to have reported on. The question of whether this would lead to a negligence action against them was addressed in the recent case of Hubbard v Bank of Scotland Plc (2014).
The surveyor in this case provided a valuation report in 2005 on behalf of the bank and noticed cracking which he did not think was recent movement. In 2011 the owner noticed significant differential movement adjacent to the original cracks and the house had to be underpinned. The owners of the property brought a claim against the bank on the basis that their surveyor had failed to properly advise them to investigate the cracking further and that the value could be reduced. It was actually found that the cause of the differential settlement was water undulation in the soil. The surveyor in question was not a soil expert and was only preparing a valuation report. It was held by the Judge that the surveyor was not negligent for expecting a valuer to recommend a full structural survey on the basis of a small, old crack that was not ongoing.
This is a warning to any prospective purchaser of a property who wishes to rely on a valuation-only survey from a bank. If things go wrong in the future it remains to be seen whether you would be able to make a case out against the lender if the report does not identify defects which become apparent.
Employing a surveyor to carry out a Full Structural or a Home Buyers Valuation and survey may provide you with more protection.
By Liam Waine, Partner and head of the professional negligence team