Court denies B2L investor redress on overvaluation in landmark ruling
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Buy-to-let investors may no longer be able to sue valuers for overvaluing property following a landmark case in the Court of Appeal.
On June 17 the court ruled that valuers do not owe the same duty of care to buy-to-let investors as residential buyers.
In October 2010 the High Court awarded landlord Emmett Scullion £72,000 plus interest following a legal case against Bank of Scotland-owned Colleys.
He had accused Colleys of overvaluing the value and market rent for a buy-to-let new-build property he purchased in 2002.
Colleys had valued the property at £353,000 and estimated a rent of £2,000 a month, but the property only let for £1,050 per month and was later sold for £270,000.
However, the judge has upheld an appeal by Colleys, ruling that due to the investment nature of the purchase it was not clear that he would rely on its report rather than obtaining his own advice.
Marie-Louise Gobbi, the solicitor at Walker Morris who represented Colleys, says: “The decision is good news for surveyors and provides a clear basis for resolving similar claims in the sector.
“The explosion of interest in the buy-to-let sector and ownership of property as an investment during the property boom and bust has prompted a surge in professional negligence claims.”
She adds: “There will continue to be plenty of scope for dispute and debate. But it is hoped that this case and the important liability and quantum principles established by it, will encourage the swift and sensible resolution of many such claims.”
In his conclusion to the case, Judge Richard Snowdon QC said that his decision was not one he had reached with any satisfaction. He said Scullion appeared to have been taken advantage of by a property club which had encouraged him to buy the property and had been misinformed by Colleys.
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