Surveyor – Negligence – Site acreage – Defender preparing valuation report in connection with pursuer’s application for residential mortgage – Report restating acreage of property as set out in sales particulars – Pursuer not disputing accuracy of valuation but claiming report negligently prepared by reason of defender’s failure to check site measurement – Whether defender under such duty – Claim dismissed
The pursuer instructed the defender, a firm of surveyors, to carry out a valuation of a property in Buckie, Aberdeenshire, in support of his application for a residential mortgage to fund his proposed purchase of the property for £240,000. The pursuer and his uncle were each contributing £25,000 to the purchase price and the mortgage was required to fund the remainder. The estate agent’s sales particulars stated that the property was a 1.12 acre plot and described it as a fantastic development opportunity. The defender produced a report in which it valued the property at £230,000. The report noted that the site was understood to extend to approximately 1.12 acres. In fact, that information was wrong and the property was a little under 0.66 acres in extent.
The pursuer subsequently brought a claim against the defender for negligence in the preparation of the report. He contended that the defender had been under a duty to check the area of the property and had been negligent in failing to do so, since it should have been obvious to it, on visiting the site, that the area was considerably smaller than was stated in the sales particulars. Although he did not assert that the area of the property necessarily affected its valuation for residential purposes, he contended that the smaller area had severely restricted his opportunities to develop the site, which was his purpose in acquiring it.
The defender contended that its duty to the pursuer, in preparing a valuation for a residential mortgage, was no greater in scope than that owed to a lender and was therefore confined to assessing the adequacy of the security. They submitted that inaccurate site measurements made no difference to a valuation for residential purposes, in relation to which the value of the farmhouse and other buildings, not the plot size, was of prime significance. They gave evidence that the pursuer had requested only a residential valuation and had not told them that a commercial development was intended.
Held: The claim was dismissed.
It was not the pursuer’s case that the defender had negligently misrepresented the area of the site. The language used in the report made it clear that the defender’s understanding of the site area came not from its own measurement but from elsewhere; since 1.12 acres was the figure used in the sales particulars, it would have been obvious to anyone interested in the matter that the figure used in the mortgage valuation report came from those sales particulars. Nothing in the language of the report could reasonably have caused anyone reading it to conclude that the surveyor was giving his own imprimatur to that figure. If the pursuer believed that the report was confirming the size of the site, then he was mistaken in that belief and had no reasonable basis for holding it.
Although the defender had been under a duty to visit the site in connection with its preparation of a mortgage valuation, it would not have been obvious from such a visit that the area of the property was considerably smaller than was stated in the sales particulars. The defender was instructed to carry out a mortgage valuation for a property being purchased for residential purposes. Although the sales particulars described the property as affording a “fantastic development opportunity”, that clearly referred to the opportunity to refurbish, do up or convert the existing buildings and did not suggest the possibility of developing the site as a whole by demolition and rebuilding. In those circumstances, the defender was required only to value the property for residential purposes and was not required to assess its value as a commercial development venture. On a residential mortgage valuation for a property of the kind in question, the main value lay in the buildings, not the size of the plot; accordingly, there was no reason why the surveyor should be required to check the acreage of the site. A surveyor carrying out a residential mortgage valuation on a site with buildings standing on it would not necessarily have been expected to notice that the site was considerably smaller than 1.12 acres.
There was no reason to find that the defender’s valuation was not a reasonable valuation of the property for the purpose for which it was instructed; consequently, the pursuer’s claim failed.
Neil Beynon (instructed by Lefevre Litigation, of Edinburgh) appeared for the pursuer; Euan Duthie (instructed by Simpson & Marwick, of Edinburgh) appeared for the defender.
Sally Dobson, barrister
