Missing the risk of landslide damage has left valuation surveyor E.Surv facing court action.  The surveyor is being sued by sub-prime mortgage lender, Rooftop Mortgages, after a property it valued at £450,000 had to be abandoned.

The home owners, William and Alice Watson, were offered a £175,000, 10 year remortgage on their clifftop property in Torquay following E.Surv’s valuation.  When the neighbouring house was damaged in a landslide the Watson were advised to move out immediately.  The local authority cordoned off the property.  According to Rooftop Mortgages the property “is now unsaleable and of no realistic or substantive value at all”.

Rooftop is suing E.Surv for more than £145,000 for negligent valuation.  The lender says that E.Surv did not mention that the house was near a cliff in its report.  It also failed to realise the significance of cracking in the walls and did not recommend a geological survey.

Rooftop is also claiming that E.Surv was negligent for not properly taking into account the owner’s assertion that the property was worth £500,000 despite having been bought for £189,000 just two years earlier.  Rooftop says that E.Surv “failed to consider the significant potential for the low price to have been associated with a risk factor connected with the property’s close proximity to the cliff”.

We will have to wait and see the outcome of this case, but it illustrates just how important it is for surveyors to take all aspects into account when valuing a property,” James Burgoyne, Director – Claims & Technical, Brunel Professional Risks, said:  “Professional indemnity insurers look carefully at surveyors’ insurance claims records when they decide whether or not to insure a practice.  If a firm has a track record of insurance claims for missing vital factors in a valuation it will make it far harder and far more expensive to secure good value insurance. Now that the lender “confetti” claims period is drawing to a close, other trends in a valuation firm’s claims history will be more identifiable.

Reports about the case have been published by Mortgage Strategy and Money Marketing.