For the first time the Courts have decided that a valuer will be liable in negligence for incorrect advice given to a purchaser of a buy to let property. Landlords are also being advised that any such liability may cover rental as well as capital valuation.
In a recent case in the High Court, Colleys, part of the Halifax plc group, were found liable to compensate a purchaser who in 2002 agreed to buy a 2 bedroomed flat in Cobham, Surrey. The surveyor at Colleys provided a valuation to the mortgage company who were to lend the purchase price assessing the open market value of the flat at £353,000 and the rental it might achieve at £2,000pcm.
After the purchaser bought he was only able to let the flat for about one half of the monthly rental which Colleys had predicted and, when he came to sell it in May 2006, made only £270,000. The purchaser successfully sued to recover his losses from Colleys.
Buy to let landlords who find that the capital or rental valuation of their property is not as advised when they bought or re-mortgaged might therefore find it worthwhile to take legal advice as to whether they can recover their losses from the mortgage valuer.
For further information, please contact Nick Lambert on 0114 266 6660 or email [email protected].