Let’s start with the formal position- there is no legal requirement for a homebuyer to commission a private survey. Frankly many purchasers still don’t take this step as they erroneously rely on the fact that a mortgage provider has made their own assessment of some kind.
Let’s skip the fact that increasingly this involves the lender relying on a software algorithm to estimate value and that nobody physically attends the property. Cash buyers do not even have this flimsy form of comfort.
That reality aside, there are a number of good reasons why recommending clients take this step in relation to what is likely to be their biggest purchase ever, is a very good idea.
For the client, in a worst case scenario, significant defects and unexpected costs could be missed, turning a dream home into a nightmare.
From the conveyancer’s perspective, there are plenty of real world examples that demonstrate the potential direct negative impact on their business of not doing so.
We all recognise that unlike some other stakeholders in the process, solicitors have a clear duty to act in their client’s best interests, which includes advising them on potential risks associated with property purchases. Not recommending a private survey when it would have been reasonable to do so, and when the client could suffer financial loss as a result, could be considered a breach of this duty.
For example, if a structural survey would have revealed a major defect that was missed, and the client later suffered a loss due to the defect, this could be a case for negligence.
Its not a coincidence that The Law Society recommends that conveyancers advise clients to commission a survey. Whilst not always public, firms have faced complaints to the Legal Ombudsman or claims against their professional indemnity insurance for not warning buyers about the limitations of a mortgage valuation or for not passing on information that would have led a reasonable buyer to commission a survey.
As an example, a solicitor might be judged negligent for not recommending a survey if the property is old, has had previous structural issues, or if there are visible signs of potential problems. A loss could be calculated to include the cost of repairs, the reduced value of the property due to the defect, and other related expenses. Claims of this kind could feasibly arrive up to 15 years later- though most occur in the first 24 months of occupancy as issues are identified.
Courts expect conveyancers to flag issues that a competent professional would notice. This includes evaluating search results, missing consents or (of most relevant here) construction anomalies that a formal survey would identify.
Claims of this kind can be part of a wider case that when the solicitor did not insist on or at least recommend a survey, it was part of a broader failure to advise on risks.
A feasible defence could be that its ultimately the buyer’s decision, but reliance on this point alone is hardly a rock solid risk mitigation strategy and perhaps more importantly, is it really the stance to take as a trusted advisor and professional firm in what is undeniably a service industry-one where customer experience and satisfaction has an undeniable impact on future business?
Richard Sexton is Commercial Director at HouzeCheck
One Response
It applies so much more to buying property in another country and legal jurisdiction. Survey Spain advise clients buying in Spain and regularly come across, “Nobody gets a survey in Spain”. Oh yes they do and rightly so as building structures worldwide are made up of thousands of parts, often stressing against each other and eventually a severe climate of intense heat and dryness changing to cold and damp has inevitable destructive consequences. And new build can suffer from sloppy workmanship, poor supervision and ‘shortcuts’ in the same way.
The legal accuracy of description is more complex than under English or Scottish law, as many property descriptions, both tax and legal are not up to date. We’ve enabled a number of lawyers to avoid errors as we visit and measure properties, which most of the abogados (lawyers) don’t do. Access across another owner’s land, undeclared extensions, neighbour’s access across the garden, etc, are just some of the examples. “What can possibly go wrong?” “Lots!”