Valuers and insurers will breathe a huge sigh of relief after the Court of Appeal limited the duty of care which a valuer owes to a buy-to-let investor.
The decision in Scullion v Bank of Scotland t/as Colleys was handed down this morning by the Court of Appeal.
In 2002 Mr Scullion agreed to buy a two bedroom flat on a buy-to-let basis based on a valuation by Colleys, the Bank of Scotlands valuation wing. In time the valuation turned out to be optimistic, and Scullion sought damages. Colleys denied it owed the usual duty of care because Mr Scullion wasnt a residential buyer and that any duty had been discharged by a disclaimer in the mortgage application.
Whilst the High Court found the surveyors to have owed a duty to the purchaser (who was not their client), the Court of Appeal has today disagreed with that judgement, stating that a valuer of a residential property does not owe the usual duty of care to a borrower if he was instructed by a commercial lender and the borrower is a buy-to-let investor.
Tim Johnson, a lawyer at Browne Jacobson who specialises in professional negligence claims, commented:
"In reaching this decision, the Court of Appeal has ruled that there is a distinction between standard purchasers to whom a duty is owed and buy-to-let investors.
"This decision will be welcomed by valuers and their insurers, who will have been concerned by the earlier High Court decision which, if upheld, could have led to a spike in the number of professional negligence claims in a sector that has already been badly hit by the downturn in the housing market."