Thursday, June 23, 2011

Valuer had no duty of care to buy-to-let borrower

Valuer had no duty of care to buy-to-let borrower

Caveat Emptor and so now surveyor can put down anything they like for BTL valuation... 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.”

Posted by easybetman @ 09:02 AM (2280 views)
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11 thoughts on “Valuer had no duty of care to buy-to-let borrower

  • A couple of points spring to mind here (1) Bank of Scotland part of Halifax/LTSB now Lloyds Banking group own Colleys and for every case I’ve ever placed through that group they have always used their own in-house valuer ie Colley’s (2) Walker Morris solicitors is also on the same group panel for conveyancing purposes (now I cant be 100% certain at this stage that it is the same Walker Morris but it will be one mighty coincidence if not !) Essence of 1 & 2 (IMO) conflict of interest/Vested interest.

    The problems are mounting for BTL

    Brokers abusing B2L for self-cert clients, says FSA (Mortgagestrategy 23/06/2011)

    The Financial Services Authority says brokers are using buy-to-let and let-to-buy mortgages for self-cert customers who would not qualify for a residential mortgage. In its latest Mortgage Lenders’ Round-up newsletter, David Geale, manager of retail intermediaries and the mortgage sector at the FSA, says lenders offering buy-to-let and let-to-buy products need to ensure that their systems and controls cannot be gamed by intermediaries. He says: “We are aware that some buy-to-let and let-to-buy mortgage products are being used by intermediaries to circumvent the more stringent income and affordability checks now undertaken on residential regulated mortgages..“This is particularly the case where lenders are offering buy-to-let products to first-time buyers and where the affordability test is based on projected rental income only. “We believe lenders with weak systems and controls are more likely to be exploited by intermediaries still looking for self-cert mortgages.”

    SOURCE http://www.mortgagestrategy.co.uk/regulation/brokers-abusing-b2l-for-self-cert-clients-says-fsa/1033291.article

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  • mark wadsworth says:

    It’s the sort of case when you want all the parties to lose, and in an ideal world, the lawyers and barristers would end up not being paid.

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  • So as far as our courts are concerned, BTL investors carry all of the risk. Maybe the banks have a similar point of view.

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  • Sorry for not reading the article.
    What you are saying sounds very odd to me.
    If the house investment is in lieu of a pension pot then I’d have thought equitable behaviour was quite important.
    Let To Buy is where you let your current home and move into the place which is newly bought.
    So, I’d guess that this would be a different scenario.

    It just sounds unfair.

    Mike

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  • Yesterday there were calls for BTLers to be treated like SME’s to support their growth, and now we see a BTLer who is complaining because he could only get £1050 rent for a property when he was told he could get £2000. Now I know that everyone in business needs outside help from “experts” from time to time, but if this is how well this landlord knows his market I’d suggest he is in the wrong business.

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  • mark wadsworth says:

    TT, yeah, but this poor entrepreneur was clearly the victim of ruthless tenants exploiting market failure and refusing to pay “what it was really worth”, so maybe the government ought ot start imposing MINIMUM rents to ensure that this vital sector of the economy flourishes.

    And if that sounds a bit far fetched, then maybe the government could invent some direct taxpayer-funded cash payment to these hard working and industrious people to bridge the gap between what scummy tenants and prepared to pay (because they want to spend all their money on booze and flat screen TVs) and the income which BTLers need to be able to keep the banks afloat- we could call it something like “Housing Benefit”.

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  • sibley's b'stard child says:

    Nonsense MW, that would never get off the ground; the taxpayer wouldn’t stand for it.

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  • MW – well as we also keep hearing that rents are rising due to increasing demand, then there should have been a queue of tenants forming who were prepared to pay £2000 if that’s what it was worth. I’m sure he wouldn’t have complained if he got £2500 for it, even though that would still have been a lousy valuation. These people who “invest” because they like the sound of the returns, and then whine when it all goes Pete Tong really wind me up. If you want your money to be safe, stick it in the post office.

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  • general congreve says:

    @6 – Well said, that man.

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  • What the article doesn’t say was that Mr Scullion required a mortgage of £283,000 and stated on his mortgage application that the purchase price of this 2 bed flat was £353,000, when he was actually paying £298,000. I understand that the developers Linden Homes provided the advance.
    Hmmmmm!

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  • p. doff – thanks for the extra detail – where do you think this leaves drive-by and desk top valuations?

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