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Bank Of Scotland Wins Landmark Buy-To-Let Ruling

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A LANDMARK Court of Appeal ruling has closed the door to buy-to-let investors making claims against property surveyors for overvaluing property.

The Court of Appeal unanimously agreed surveyors did not owe a duty of care to a buy-to-let investor in the case of Scullion v Bank of Scotland's property valuation arm, Colleys.

The case centred around the buy-to-let purchase of a residential flat by the claimant in October 2002, which surveyors Colleys valued at £353,000 and estimated a rent of £2,000 per month.

However Scullion was only able to secure a rent of £1,050 a month for the flat, which was not enough to service the £1,440 a month mortgage.

Scullion sold the property in 2006 and sued the surveyors alleging they were negligent in over valuing both the capital and rental values.

He won the case in March 2010, with the court finding the surveyors owed Scullion a duty of care and agreed the capital and rental valuation figures they gave were negligent.

Judge Richard Snowden QC characterised the low-value buy-to-let investment as being similar to a residential purchase.

He ruled the purchaser was unlikely to have commissioned his own survey and the surveyor should have known that Mr Scullion would have placed reliance on his report.

The Court of Appeal has now overturned that decision, concluding the surveyors did not owe Scullion a duty of care and as a result he was not entitled to recover the £72,000 in lost rental income he was awarded in his initial claim.

It reasoned in an ordinary domestic purchase it is highly likely the purchaser will rely on the valuation, which if incorrect may lead them to suffer financial losses.

However the Appeal Court ruled that "due to the investment nature of the Scullion purchase, 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."

It added: "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."

Stupid is as stupid does. Anybody signing onto a mortgage solely based upon taking the advice of a salesman, or in this case a property agent, gets exactly what they deserve.

For all those who've been burned by their own greed and stupidity, you can go to MSE forums for hugz, and other websites for saps.

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Stupid is as stupid does. Anybody signing onto a mortgage solely based upon taking the advice of a salesman, or in this case a property agent, gets exactly what they deserve.

For all those who've been burned by their own greed and stupidity, you can go to MSE forums for hugz, and other websites for saps.

Nevertheless, the overvaluation was extreme, and in my mind made with an intent to defraud and hence criminal.

So, although the BTLer didn't get his money, I'd like to see the surveyor get 5 to 10 with hard labour.

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imagine if Gordon Brown was still in power - Landlords should be bailed out with a new liquidity scheme to save them from their f*ck-ups, locking in stability and all that ;)

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Nevertheless, the overvaluation was extreme, and in my mind made with an intent to defraud and hence criminal.

So, although the BTLer didn't get his money, I'd like to see the surveyor get 5 to 10 with hard labour.

Meh. Was the valuation extreme? We were seeing that parabolic 10-20% YoY increases in property pre-crash.

Who's to say that was incorrect, especially when it is known by this forum that almost 90% of the UK population still has no idea what created boom in the first place.

Can't expect the judiciary to understand, as it is highly likely that most of them are up to their necks in multiple mortgages.

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Nevertheless, the overvaluation was extreme, and in my mind made with an intent to defraud and hence criminal.

So, although the BTLer didn't get his money, I'd like to see the surveyor get 5 to 10 with hard labour.

...you should always use your own surveyor...these greedies wouldn't pay out for such protection ...but try to blame someone else when they are fleeced ...it is their own fault ... :rolleyes:

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Meh. Was the valuation extreme? We were seeing that parabolic 10-20% YoY increases in property pre-crash.

Who's to say that was incorrect, especially when it is known by this forum that almost 90% of the UK population still has no idea what created boom in the first place.

Can't expect the judiciary to understand, as it is highly likely that most of them are up to their necks in multiple mortgages.

Rent hasn't increased by 10-20% YOY, in fact it hasn't really increased at all. It is the £2000 rental valuation that was negligent in my opinion when it only got a rental of £1050. That's what made the difference between a very good investment and a pretty bad one.

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Rent hasn't increased by 10-20% YOY, in fact it hasn't really increased at all. It is the £2000 rental valuation that was negligent in my opinion when it only got a rental of £1050. That's what made the difference between a very good investment and a pretty bad one.

Greater fool, mark, sucker...

So many colourful ways to describe people who subscribe to the advice of tools such as Krusty & Fill, Stuartz, and their ilk.

And the shame...

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He started a business without understanding the costs, cashflow, market, ROI etc etc if you believe what the nice salesman says without doing proper due diligence then tough, you stand to lose a lot of money. 7% return plus capital growth, if it looks too good ....

Never said the buyer deserved sympathy. Just pointed out that the surveyor involved was a criminal.

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More likely that someone high up had a word in the ear of the Appeal Court and pointed out that Banks would have almost unlimited liability for all the property greed of the past 10 years, and the Government cannot afford another bail out.

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Never said the buyer deserved sympathy. Just pointed out that the surveyor involved was a criminal.

What will be even more criminal is the barristers/solicitors fees this property idiot will have to stump up.

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Rent hasn't increased by 10-20% YOY, in fact it hasn't really increased at all. It is the £2000 rental valuation that was negligent in my opinion when it only got a rental of £1050. That's what made the difference between a very good investment and a pretty bad one.

agree with all this.

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In what way? There are just as many pwoperdy idiots per capita up here, just as there are as many crooks and suckers.

..ah but the ruling was made in England.... :rolleyes:

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More likely that someone high up had a word in the ear of the Appeal Court and pointed out that Banks would have almost unlimited liability for all the property greed of the past 10 years, and the Government cannot afford another bail out.

The floodgates would have opened if this had been allowed to stand.

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Exactly how hard would it have been to determine rental rates in that area? This particular wannabe landlord should be put on public show and have rotten tomatoes thrown at him. Tool.

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Rent hasn't increased by 10-20% YOY, in fact it hasn't really increased at all. It is the £2000 rental valuation that was negligent in my opinion when it only got a rental of £1050. That's what made the difference between a very good investment and a pretty bad one.

how was it negligent?

Maybe the neighbours were paying that?

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"concluding the surveyors did not owe Scullion a duty of care"

Then what's the point of paying them for their surveying service?

he didnt: from the article:

He ruled the purchaser was unlikely to have commissioned his own survey.

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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