In the recent case of Hubbard v Bank of Scotland both the first instance judge and the Appeal Court decided that the mortgage valuation surveyors Colley’s were not liable to the claimant Mrs Hubbard, due to the limitations of a Mortgage Valuation.
This is a reminder to all that a mortgage valuation is in no way a substitute for a building survey, which should be booked as early in the transaction as possible.
Anyone who thinks “I’ll see what the mortgage valuer says first” runs the risk that if the valuer says nothing or even if they are wrong, the buyer may have no recourse.
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In the recent case of Hubbard v Bank of Scotland both the first instance judge and the Appeal Court decided that the mortgage valuation surveyors Colley’s were not liable to the claimant Mrs Hubbard, due to the limitations of a Mortgage Valuation.
Mrs Hubbard brought the action against Colleys for failing to identify the risk of subsidence in a house she purchased in 2005. Colleys had been appointed by the Bank of Scotland to value the property in connection with a mortgage loan to Mrs Hubbard. The valuation report noted a small crack in the rear bedroom, but said that the property had not suffered any recent movement. Colleys’ report said no further action was required.
When the house suffered serious subsidence, Mrs Hubbard claimed that Colleys should have told her about the risk. She also argued that she should have been told to seek specialist advice and that the valuation should have been substantially reduced.
The trial judge ruled in favour of Colleys. He said that the surveyors report clearly stated that the survey was limited to a visual inspection and that there was no evidence that the property was subject of subsidence at the time of the survey. He also held that the Valuation Report was accurate in what it reported.
Mrs Hubbard appealed on the grounds that the surveyor should have warned her that future subsidence was likely and should have recommended that she have a full structural survey. The Appeal Court also decided in favour of Colleys. It held that the limitations of the valuation report were “amply and clearly spelled out” and that the surveyor’s duty was more limited than a structural surveyor who is expected to look beyond the surface.
The court also found that it would be unrealistic for a valuation surveyor to recommend a structural survey on the basis of seeing a small crack which was showing no signs of movement. "To set the duty at that level would mean that the sale of any property which displayed cracking of almost any kind would be held up pending a full structural survey. Such a conclusion would, I would have thought, not be welcomed by vendors, by lenders or by borrowers."
This is a reminder to all that a mortgage valuation is in no way a substitute for a building survey, which should be booked as early in the transaction as possible.
Anyone who thinks “I’ll see what the mortgage valuer says first” runs the risk that if the valuer says nothing or even if they are wrong, the buyer may have no recourse.
"Although housing has climbed the policy agenda, with supply issues dominating the private housing market, our forecast suggests that the likely increase in prices in 2016 will outstrip any rise in household income." Read the full story:
When it comes to auspicious dates, 5th April 2015 is certainly one for all who represent Non UK Resident Landlords.
From 5th April 2015 all Non UK Resident Landlords become liable for Capital Gains Tax (CGT). However, the good news is that the “Gain”, calculated only when the property is sold, is only taken from the value as at 5th April 2015.
For this reason many Non UK Resident Landlords are requesting a special CGT Valuation by registered Valuers of the Royal Institution of Chartered Surveyors (RICS), in accordance with the RICS guidance manual, the “Red Book”...... more .......
