National surveying firm Colleys has been told to pay almost £100,000 in damages to a buy-to-let investor over its valuation advice.
The high court today awarded damages of £98,981.12, including interest, to Emmett Thomas Scullion over a valuation given on a flat in Cobham, Surrey.
The purchase price of the flat of £352,950 was supported by a valuation from Colleys Surveyors (now part of Bank of Scotland), which amounted to £353,000 with a rental assessment of £2,000 per month.
Scullion, who bought the flat with a mortgage from BoS, had alleged that Colleys had overvalued the property and the rental income. Colleys/BoS denied negligence and argued that they owed no duty to the investor.
High court judge Richard Snowden QC ruled that a buy-to-let purchase was no different to a residential house purchase in that the duty of care that was owed by the surveyor in a residential purchase, also applied to buy-to-let investors.
John Kenneally, litigation partner at Miller Rosenfalck, which represented Scullion, said: “This outcome is great news for buy-to-let investors who found themselves the victim of overvaluations by surveyors in a rising market. This decision means that for residential buy-to-let valuations, where the proposed borrowers are not professional investors, surveyors are now likely to be held liable to the borrower for the content of their valuation reports.”
He added: “As the market improves and investors are able to quantify the extent of their losses during the recession, this could be the first case in a new wave of professional negligence actions against surveyors.”
To access all EGi news stories and commercial property data sign up for a free trial today, or visit the subscription options page to find out more.
