Cluttons is facing another six-figure claim over a residential valuation.
The agent, which earlier this month settled a £2m valuation claim from Channel Islands-based Economic Lifestyle Property over an East Sussex block of flats, is now facing a £1m demand from Bank of Ireland.
It is vigorously defending the claim.
A recently acknowledged writ shows that BoI is suing Cluttons and law firm GSC Solicitors after advancing more than £3m to extend the loan on a Belgravia flat.
The bank alleges breach of contract and breach of duty of care.
It claims that in 2007 Cluttons overvalued a flat at Eaton Square, SW1, by as much as 75%.
The agent gave the existing lease on the flat, which had 14 years remaining, a value of £2.1m – a figure which BoI claims Cluttons said would rise to £4.2m following the extension of the lease. It claims the agent also gave the flat a market rental value of £4,000 per week.
BoI said that, based on Cluttons’ advice, it agreed to lend Edward Welikale £3.1m to extend his lease on Eaton Square.
Welikale went into default on the loan in January 2009 and in November of that year receivers were appointed to the property.
It was sold in September 2010 for £2.5m.
BoI then sued Welikale for its losses, with the borrower agreeing to repay all sums owing after November 2015.
However, the bank is now seeking to reclaim its losses from Cluttons or GSC, on the basis that it will assign such rights as it has against Welikale to whichever firm pays.
It claims the true value of the existing lease was no more than £1.2m and that Cluttons’ figure was an overvaluation of 75%; that the value of the extended lease was no more than £3m and the true market rent was no more than £1,700 per week.
Cluttons declined to comment.
