Good news for surveyors on scope of duty in a mortgage valuation

Good news for surveyors on scope of duty in a mortgage valuation

Guest contributors, Jonathan Spencer, associate and James Robins, partner at Bond Dickinson take a look at this recent Court of Appeal decision and explain why it's good news for surveyors.

'A recent Court of Appeal decision provides reassurance to surveyors and their insurers regarding scope of duty of care in a mortgage valuation, in particular regarding the circumstances in which a valuation surveyor should recommend a full structural survey.

Hubbard v Bank of Scotland Plc (t/a Birmingham Midshires) [2014] EWCA Civ 648

Facts

Mrs Hubbard purchased a large house on an old quarry site in Wolverhampton (the Property) with the assistance of a loan provided by the Bank of Scotland Plc (the Bank). Prior to purchase, a surveyor employed by the Bank (the Surveyor) undertook a valuation of the Property for a fee of £715 and the valuation report was addressed to Mrs Hubbard (the Valuation Report).

The Valuation Report noted a crack in the wall of the rear bedroom. However, the Surveyor confirmed the crack to be in Category 0 (i.e. up to 0.1mm in width) and that the Property had not suffered from recent movement. Therefore, the Surveyor confirmed that no further action was required.

The Valuation Report contained guidance notes on the first two pages which stated:

"You have chosen a valuation report which is a limited inspection of the property highlighting only those items which we consider will materially affect value. It is prepared…in accordance with the RICS Mortgage Valuation Specification…Valuers cannot see through solids…Valuers will look at the outside of the property…You still have the option to request a more detailed report and we would be pleased to help you with this."

The claim

Following completion, the Property suffered from differential subsidence and underpinning works were

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