Bridging Lender sues Valuer over Negligent Valuation Report

A commercial secured bridging lender (Bridging Loans Limited) has issued High Court proceedings against a firm of valuers (Robert White Associates) for purportedly over-valuing a property upon which it took a charge over as security for funds lent to a borrower. The borrower defaulted on the loan and receivers were appointed over the property. The property was sold with the net shortfall from the sale proceeds being around £280,000.

Do you have a claim against a professional? If you want expert legal advice, do not delay in instructing us so we can assess the legal merit of your case. We can often take on such claims on a no win no fee basis (such as a Conditional Fee Arrangement) once we have discussed the claim with you and then assessed and advised you on the merits of the proposed professional negligence action.

Our expert legal team of leading Professional Negligence Solicitors & Barristers can provide urgent help, advice or representation to you. Just call our Professional Negligence Lawyers on 02071830529 or email us now.

The facts

In October 2015, Bridging Loans Limited considered lending monies to a borrower, to be secured on a property comprised of two plots of land. The lender approached the valuers to advise as to the value of the property for the purpose of secured lending. The valuer provided a valuation report on the basis of a number of contingencies.

The upshot is that when the borrower defaulted on the loan, and the receivers came to sell the property in 2019, the market valuation of the property and the sums received in the sale were some £200,000 less than what the valuer had advised in 2016.

Does the valuer owe a duty of care to its client?

Yes, in the contractual retainer and it also owes a duty of care set out in tort. The lender claims that the valuer at all material times held itself out as being a competent and experienced valuer of commercial and residential property. The lender also claims alternatively that it was an implied term in the contract for the valuer to carry out its instructions with reasonable care and skill (see section 13 of the Supply of Goods and Services Act 1982). Further the lender claims that the valuer owed a duty of care to use due care, skill and diligence in carrying out the instructions.

Has the valuer breached the duty owed to the lender?

The action is pending, so this has not been ruled upon by the court. In short, the lender claims that the valuer:

  • failed to undertake a detailed review of the relevant documentation in respect of the property;
  • negligently based the valuation on the rejected application for planning for 10 flats consisting of one 1 bedroom flat and nine 2 bedroom flats. Instead, it should have based its valuation on the approved application for three 1 bedroom flats and seven 2 bedroom flats;
  • failed to provide any methodology for the calculations contained in the valuation report;
  • made contradictory statements within the valuation report; and
  • failed to provide copies of the valuations obtained from comparable local evidence and advice from local agents.

Professional Negligence Claim Form against Valuer

Professional Negligence Particulars of Claim against Valuer

Why should I instruct a solicitor in my claim against a valuer?

Mistakes made by professionals in the property industry such as surveyors, chartered surveyors and quantity surveyors can lead to serious financial loss. Professional indemnity insurers will often instruct a specialist City of London law firm to defend claims vigorously and therefore it is essential to take legal advice at the outset from our expert professional negligence team.

What evidence is required to bring a negligence claim?

Where a professional negligence claim is brought/defended, the surrounding evidence will be critical. Early evaluation of the evidence is key, such evidence includes the retainer, correspondence with the professional, evidence of breach and proof of losses.

How much compensation can I get if my valuer has been negligent?

If it can be proved that the valuer owed a duty of care, the valuer by act or omission breached this duty, and the breach caused loss to you, then you have a claim for damages. The courts usually measure damages in a valuer’s negligence case as the difference between the price paid by the buyer of the property and what the market value of the property actually was.

How do I prove that my valuer has been negligent?

Like all negligence actions, in order to claim compensation, the following three elements need to be made out by a claimant to prove the tort of negligence:

  1. Duty of care – The defendant owed the claimant a duty not to cause the type of harm suffered.
  2. Breach of duty – The defendant breached the duty owed.
  3. Causation – This has two elements, both of which must be proved ie (a) factual causation in that the claimant must prove, but for the defendant’s negligence, they would not have suffered loss and (b) legal causation or remoteness in that the defendant’s negligence was the legal cause of loss.

Common examples of negligence by a professional in the property industry

  • Failing to provide an accurate surveyor inspection report: for example failure to discover defects like dry rot, woodworm, a leak or subsidence issues affecting the structure of the property.
  • Over-valuing a property: if a valuation report transpires to be over-valued and you have purchased the property at above the market rate, then you may have a claim for damages against the surveyor.
  • Burdens affecting the property such as rights of way or restrictive covenants not being investigated or warned about.
  • Failing to ensure building regulations consent, listed building consent, conservation area consent, planning permissions have been provided before exchange of contracts or completion.
  • Incorrect budget planning, for example in Riva Properties Ltd and others v Foster + Partners Ltd[2017] EWHC 2574 (TCC), the court held that the architect firm failed to identify key constraints for the project.
  • Poor or incorrect building design advice by an architect.

Book an Initial Consultation with our Professional Negligence Lawyers

Do you have a claim against a professional? If you want expert legal advice, do not delay in instructing us so we can assess the legal merit of your case.

We can often take on such claims on a no win no fee basis (such as a Conditional Fee Arrangement) once we have discussed the claim with you and then assessed and advised you on the merits of the proposed professional negligence action.

Our expert legal team of leading Professional Negligence Solicitors & Barristers can provide urgent help, advice or representation to you. Just call our Professional Negligence Lawyers on 02071830529 or email us now.

Instruct Specialist Professional Negligence Solicitors

We are a specialist City of London law firm made up of Solicitors & Barristers operating from the only law firm based in the Middle Temple Inn of Court adjacent to the Royal Courts of Justice. Our team have expertise in advising on claims for compensation against professionals that have fallen below the standard expected, which causes clients financial or personal loss. We are experienced in bringing successful claims against negligent solicitors, barristers, financial advisers, insurance brokers, surveyors, valuers, architects, tax advisers and IFAs.

Want legal advice on the merits of your case?

Our simple enquiry form goes immediately to our litigation team in Middle Temple, London. Call us on +442071830529 from 9am-6pm.

LIMITATION ACT 1980 – WARNING

The Limitation Act 1980 sets out strict statutory deadlines within which you must bring litigation claims. Your legal rights will become irreversibly time-barred if you fail to take legal action (or defend a claim on time). Therefore, you should seek specific legal advice about your legal dispute at the very first opportunity so that you understand the time you have left. Failure to take advice or delay in taking action can be fatal to your prospects of success.

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