Negligent Valuations

NEGLIGENT VALUATIONS

There has been an unavoidable increase in claims against valuers by mortgage lenders, banks, and investors in respect of negligent valuation and, in a minority of cases, in respect of fraudulent valuation as a result of the distressed property market which occurred as a repercussion of the global financial crash in last decade.

A valuer is duty bound to exercise reasonable skill and care just like any other professional. This doesn’t mean that he/she is obliged to get exactly the right value. When the court considers a valuation one of the factors it takes into account is what a competent valuer would regard as the correct range of values, or margin of error, to be applied to the property in question. In case the alleged negligent valuation falls outside the range then the valuation may be termed as negligent.

In both banks and building societies, buy-to-let investors were quite active in the buoyant property market which ended in 2008. Over-ambitious rental and capital valuations have resulted in a large number of valuers’ negligence claims by disappointed investors whose expectations have let them down.

Many banks and building societies have shown patience with their borrowers in the hope that the property market will improve. Since that hasn’t happened so far some of them are enforcing their securities now, suffering shortfalls and determining if they have claims for negligent valuation.

As is true of all claims it is recommended to obtain advice as soon as possible. We can offer advice regarding the merits of a claim, mitigation, and funding; and we can also assist in presenting a case and dealing with valuers’ insurers. Litigation represents a large part of our practice and therefore if it might not be possible to settle a case in the early stages, therefore we can provide representation in any subsequent litigation as well.

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