"those Who Joined The Buy-To-Let Rush In The Early 2000S, Only To See Their Property Prices Plummet, " admission and capitulation from Letting Agent Today
Posted 23 June 2011 - 09:19 AM
"The result puts an end to speculation that those who joined the buy-to-let rush in the early 2000s, only to see their property prices plummet, would seize the opportunity to make a claim against valuers.
Marie-Louise Gobbi, the solicitor at Walker Morris who represented Colleys, said: “The Court of Appeal’s judgment clarifies the extent of the duty owed by valuers in buy-to-let situations. The decision is good news for surveyors, and provides a clear basis for resolving similar claims brought in the buy-to-let sector.
“Buy-to-let investors are not in the same position as ordinary domestic purchasers, and cannot assume they will automatically have the same rights and remedies. The case also provides crucial guidance on the calculation of damages in rental over-valuation cases.”"
I feel that some protection/forbearance is owed owner-occupiers who bought at a high price, as they were essentially buying a roof over their heads, egged on by societal pressure (govt, famiuly, work)
BTL however, appears to be getting hung out to dry by the Powers that Be.
No money tree then.
Posted 23 June 2011 - 09:41 AM
Posted 23 June 2011 - 09:46 AM
The court’s reasoning was that in ordinary domestic purchases it is highly likely that the purchaser will rely on the valuation, and if it is incorrect they may suffer losses. Therefore it is right that the duty of care extents to the ultimate purchaser – ie the modest residential owner occupier.
However, due to the investment nature of the purchase in this case, it was not sufficiently clear that it would have been foreseeable by Colleys that Mr Scullion would rely on its report rather than obtaining his own advice; for similar reasons there was no sufficiently clear proximity of relationship; and in any event, it was not just and equitable that Colleys should be liable to Mr Scullion because the transaction was commercial in essence.
The result was that Colleys owed no duty of care to Mr Scullion, and so had no liability to him in negligence and therefore no damages were owed.
The Court of Appeal also recognised that it was not correct to attribute all loss of revenue which Mr Scullion suffered in connection with the property to the inaccurate rental valuation. Clearly there were periods when it would have been unlet and/or unsold for reasons unrelated to the over-valuation.
The appeal decision therefore goes on to give crucial guidance as to how damages in rental over-valuation cases should be calculated and capped.
The decision is good news for surveyors. The Court of Appeal has made a strong statement that it was wrong in principle to extend the duty of the lender’s valuation surveyor to purchasers in commercial cases. Domestic owner-occupier cases are seen as a justified by consumer protection principles, with buy-to-let investors less deserving of protection and more likely to obtain and to be able to afford their own valuation.
Posted 23 June 2011 - 09:50 AM
Fair enough, unless of course there was collusion between the surveyor and the builder/vendor.
Posted 23 June 2011 - 09:55 AM
Interesting, and reasonably sensible IMHO, but I would have thought that a better case could be made for establishing whether the valuation was given in good faith or not and deciding on that basis. Was the valuation reasonable at the time of the valuation? If not, then the valuation was either incompetent or fraudulent.
Posted 23 June 2011 - 09:57 AM
surely that depenmds on the valuation criteria of the mortgage lender, and even then it is up to the lender to sue; apparently the valuer bears no responsibility to the mortgagee in this case
This post has been edited by Si1: 23 June 2011 - 09:58 AM
Posted 23 June 2011 - 09:59 AM
Posted 23 June 2011 - 10:17 AM
That seems to be the logic - I'm just not quite clear how this makes a difference where fraud has been practised. I'm on the fence when it comes to incompetence. On the one hand, as you say (and reflecting the ruling), the 'investment' buyer should take more care, but on the other, why should home-buyers, presumably making one of the biggest purchases of their lives, treat it as though it was a cardigan from M&S?
I dunno - if you buy into a bubble, then you might well get burned, but I think the valuation should stand up to a certain level of scrutiny in terms of was it reasonable at the time it was made.
Posted 23 June 2011 - 10:27 AM
The issue with this for me is that he used the bank's surveyor who has the bank's interest at heart rather than the borrowers, if he had retained his own surveyor and they had done the same the outcome might be different. The court has essentially viewed him as negligent for being inept in not using is own surveyor with his interests at heart but being silly/cheap in using the other parties'.
Banks at the time were quite happy with high valuations (both types) as it enabled them to lend more to customers and hence get more income from them - the opposite to many bank now.
There will still be plenty of cases to come, this has only closed the door on mis-valuation by the other party's surveyors only, if your own surveyor has f*%ked up still fair game. Most of the BTL promotion companies weren't licensed for investment advice...
Posted 23 June 2011 - 10:33 AM
Still, I suppose some ambulance chasers will make a few quid.
Posted 23 June 2011 - 10:40 AM
THE Elephant in the Room and THE fuel that powered the whole corrupt Ponzi/Pyramid Scam....
HERE IN THE UK: THE UK SUB-PRIME CATASTROPHE - IT IS NOT ONLY IN AMERICA!! THE UK LIAR LOAN INDUSTRY - Source of FICTITIOUS "MONEY", and the principle driver of the House "Price" Pyramid/Ponzi Scam & Bubble, the "Credit Crunch" - and an unacknowledged major part of and cause of the ensuing Worldwide Financial Crash.
The following was reported in a superb documentary in late 2003 - This is now nearly 10 years ago!! Since then little has been done here in the UK to dig down deep on this vast elephant in the room: Why? If you're a serious journalist - here's your story - start investigating - it is the biggest financial scandal of all time:
THE ARTICLES BELOW ARE FROM AS FAR BACK AS 2003!!
Mortgage customers 'urged to lie' - All this was way back in 2003 by the way!!
Housebuyers are being encouraged to break the law in order to obtain huge mortgages, the BBC has discovered. Brokers, and even banking staff, have been telling buyers to lie about their incomes to get bigger and bigger loans. And these underhand tactics could also be the reason why house prices have gone on rising for so long.
CLICK HERE - http://news.bbc.co.u...ess/3222053.stm
"Could you believe that a bank would invite customers to defraud it? It may sound incredible, but that is what some of Britain's biggest mortgage lenders have in effect been doing."
CLICK HERE - http://news.bbc.co.u...ess/3478635.stm
The BBC Money Programme uncovers massive mortgage fraud [2003!]: BBC TWO's The Money Programme has revealed a huge mortgage fraud with brokers from some of Britain's biggest estate agents and financial advice groups advising customers to break the law and lie about their incomes to get massively bigger mortgages. And it shows how the illicit cash raised by this method has been pouring into the housing market, boosting prices and leaving many people risking financial ruin.
CLICK HERE http://www.bbc.co.uk..._mortgage.shtml
AND READ THIS: - http://www.housepric...howtopic=152508
WATCH THE VIDEO OF THE 2003/4 DOCUMENTARY HERE: - http://www.youtube.c...d&v=vT1UnGS91BY
Click on parts 2 & 3 as you go along watching this video.
AND WATCH THE LATEST VIDEO OF LIAR LOANS STILL IN ACTION HERE in 2008 - http://news.sky.com/.../20080641317257
Posted 23 June 2011 - 10:42 AM
The courts are drawing a line on people trying to get compensation from suing the fine,. upstanding people involved with property.
Basically - if you're a BTL muppet then you cannot cry and say the bank/surveyor made me do it.
I would guess 80%+ of BTL bought since 2002 have a number of issues.
I cannot comment of London but A few towns I follow are getting horrendous voids - 3 months/year.
AFAIK, the shoe shiners went big on BTL from 2004-2007.
It always used to make me cringe when EA's used the term 'ideal investment opportunity' Talk about opening yourself up to a load of legal grief a few years down the line.
Posted 23 June 2011 - 10:48 AM
They don't need to be. I can sell you a whole BTL, house, ostrich, name it. If an asset is sold to a single individual then I can make pretty much any claim I like - Buy this pencil. Fantastic investment - 30% return/year. Basically, buyer beware.
However if I sell something to a group of people then it comes under security law.
Aside from liar loans, which are well known + documented on this board there is another property area which I'm keeping my eye - individual rooms in hotels and the like. There is a loads involved with this - selling a hotel room form someones SIPP. The fallout from this will be massive.
As the room is owner outright, the seller can loads of nuts claims - 30% return etc.
Have a google for Skelwith group and its hotels.
Posted 23 June 2011 - 01:24 PM
I think the argument is that a person (not just a surveyor) has a duty of care to another party where they can reasonably forsee that they will place reliance upon their work.
What they should be doing is including a disclaimer along the lines of "this report is made solely to Bank of Money PLC .............. to the maximum extent permitted by law we do not accept or assume responsibity to any other party......."
Told you - Young Goat December 2007AD
We are all waking up to the reality that our houses aren't worth what we thought they were. - David Willetts MP 15 March 2011.
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