Mortgage Valuation Specification

Mortgage Valuation Specification (as appended to the Red Book (7th Edition))9. Arguably Scullion has restricted the liability of surveyors (however, it is interesting to note that in Smith it was indicated that the decision might have been in favour of defendant had it not been a modest residential property) and made it considerably harder for such investors to pursue valuers in the absence of a contractual relationship but land valuers still have a wide liability.

Circumstances are possible where a buy-to-let borrower might be able to recover, such as where a valuer is expressly aware the borrower is not obtaining his own report – or where the valuer has given more advice about the rental potential than was the case in Scullion. Moreover, Lord Griffiths10 expressly reserved his position on the existence of a duty for other types of valuations, such as for industrial property, large blocks of flats or very expensive houses as the purchaser of such properties might be expected to obtain their own valuation.

Much will depend upon the specific facts of the case. Legal clarity, coherence and unfairness Lord Neuberger expressed some sympathy for Mr Scullion, but nevertheless came to a result that "the law as developed… will satisfy two even more important requirements of any judicial decision, namely legal clarity and coherence, and fair results in ensuing cases".

This decision has thus put a clear distinction between a residential and commercial buyer. It might be said that there is an alternative of distinguishing a modest buy-to-let investor from a rich multiple property investor for the reason of clear liability of land valuers by, for instance, setting a threshold of the amount invested but it would lead to further complications and uncertainties.

However modest a buy-to-let transaction it is better not to consider it similar to a residential purchase and there should not be any exception for the particular circumstances of a buy-to-let purchaser. Thus, the law in this area can be said to have developed consistently by providing a clear demarcation between residential and investor buyers. Conclusion In conclusion, a finding of a duty of care seems to be directed principally by practical solutions and policy considerations.

Though Scullion might be seen as an unfair decision and a formidable obstacle to claims in tort by property investors it gives clarity to the law in land valuation by setting boundaries to the characteristics of people able to rely on such claim but, as ever, facts decide cases and care will always be necessary to check whether or not the individual facts of any case might warrant a different outcome. 1 [2011] EWCA Civ 693 2 Naomi Park, 'Surveyors duties: buy-to-let properties' ([email protected], Nov 2011) < http://www. melvilleburbage. co. uk/assets/Zurich-Insurance-Professionals-at-Risk-Nov-2011.pdf> last accessed on 23 March 2012 3 [1964]

A. C. 465 4 [1990] 1 A. C. 831 5 [1990] 2 W. L. R. 358 6 Sarah Mawbey et al, 'Valuers: no duty of care to buy-to-let purchaser' (Devonshire Claims Service Newsflash, June 2011) < http://www. dcsclaims. co. uk/files/Newsflash-June2011. pdf> last accessed on 23 March 2012 7 [1982] QB 438 8 [2011] EWCA Civ 693 9 RICS Residential Mortgage Valuation Specification clearly states that a valuer should fully research, document and retain comparable rental evidence, and that the comparable evidence relied upon should be as robust as that obtained in support of the capital valuation.