CMBS issuers will be able to bring claims against agents for negligent valuations despite a landmark ruling that overturned damages awarded against Colliers International.
At the Court of Appeal this week, commercial mortgage-backed securities issuer Titan was told it was entitled to sue Colliers for a 2005 valuation of a property in Germany despite overruling the high court’s view that the valuation had been negligent.
Berwin Leighton Paisner real estate dispute partner Joanna Lampert said the entitlement would lead to more claims. “A number of CMBS-based negligent valuation cases in the pipeline are now likely to move forward on the basis of this principle having been affirmed,” she said.
The high court had awarded Titan €32m (£23.7m) in damages after determining that Colliers’ €135m valuation of Quelle’s headquarters in Nuremberg was beyond the permissible 15% margin of error.
It said the property should have been valued at €103m. The Court of Appeal’s valuation of €118m meant Colliers’ original sum was €700,000 within the 15% margin.
jack.sidders@estatesgazette.com
