Surveys

Let the buyer beware - ‘Caveat Emptor’

It is crucial for a buyer to have a house or flat professionally surveyed before the exchange of contracts occurs.

Conveyancers are not qualified to advise buyers on the value, structural integrity, or the physical condition of the property. Such advice should be obtained from a surveyor.

Under English law, sellers are generally not obligated to ensure that the property is physically suitable for the buyer or that it meets planning, building regulations, or other legal requirements.

If you exchange contracts or bid at an auction without a prior survey, you might find yourself unable to secure a mortgage if defects are found during the lender's valuation. In such a case, withdrawing is not an option, and failure to complete the purchase could result in you being liable for significant damages for breach of contract, including the seller's fees and losses. Relying on title or other insurance to cover all issues is a misconception; it is not a viable solution. It is always advisable to have any defects professionally evaluated.

A professional survey is essential

It's advisable for all home buyers to obtain a professional survey before the exchange of contracts. On average, buyers incur £5,750 in repairs after purchasing a home, with many of these repairs being unexpected post-move. A survey allows buyers the opportunity to renegotiate the price, considering the necessary work, or to decide on the purchase of the house or flat. The surveyor is the sole professional who inspects the property during the buying process and can generally advise on boundary information provided by your conveyancer.

Purchasing a home is likely the most significant transaction you will make. This is why the Consumers' Association (Which?) and numerous other professional and consumer organizations recommend having a survey done before committing to a home purchase.

Valuations are not surveys

Banks and other lenders will always value a home before agreeing to provide a mortgage. However, their primary concern is ensuring they can sell the property and recover the funds they lent for its purchase.

There might be defects in the home or its structure that a valuer's inspection does not reveal, especially if it's merely a 'postcode' valuation or a basic inspection. Additionally, there may be omissions or inaccuracies in the valuation report that are irrelevant to the lender but could be significant to you. For instance, if you're purchasing a home for £300,000 and borrowing £150,000 from the bank, they may be content to lend the amount even if the home requires £20,000 in repairs. They stand to recover their loan and associated costs upon sale, but you would have overpaid for the property.

Remember, the lender won't live in the home and won't deal with issues like blocked drains, leaking roofs, defective utilities, or settlement cracks in the walls—you will.

Be mindful that the bank's valuation is conducted by the bank’s surveyor for the bank's benefit, not yours, even if you pay for it. You cannot sue their surveyor if they overlook something. Conversely, if you commission your own survey, you can depend on it. Your surveyor will be legally liable to you if they miss something or overvalue the property. They are also expected to carry professional indemnity insurance to cover claims for losses caused by negligent surveys.

Normal consumer rights do not apply

The standard consumer rights to quality and fitness for purpose that apply when you purchase a car or any other consumer item from a high street retailer do NOT extend to the purchase of houses or flats, whether from a builder or a private seller. You might receive an NHBC guarantee from a builder for a new property, but its coverage can be quite limited, and enforcing it will be at your expense.

Moreover, exercise caution regarding any unverified 'verbal' comments, assurances, or statements made by the seller or their estate agents about the property, as they are generally unenforceable unless they have been confirmed in writing by your conveyancer before the exchange of contracts. This underscores the importance of Property Information Forms, Searches, and Enquiries.

Therefore, if the seller or their agent has made a statement that significantly influences your decision to purchase a property, you should have your conveyancer formally verify the statement. This will make it legally binding on the seller, who will then be liable for misrepresentation if the statement proves false.

Sellers and agents must not mislead buyers

The newly implemented 'Consumer Protection (Amendment) Regulations, 2014/870' obligate sellers not to mislead buyers or provide inaccurate or ambiguous information. While these regulations have yet to be tested in court, litigation over alleged comments or statements could prove costly and unpredictable. It is advisable to have any such statements verified by your conveyancer and to ensure the property is surveyed by a professionally qualified surveyor.

Surveys - the choices

You can obtain a Home Condition Survey from any of the 200 members of the Residential Property Surveyors Association. This survey offers an in-depth inspection comparable to a building survey but is presented in a straightforward style with a 1,2,3 rating system, allowing you to easily identify the most critical issues, accompanied by photographs of pertinent problems. It encompasses the building's condition and defects, structural movement, dampness, rot, woodworm, heating, drainage, electrical services, alterations, additions, and the estimated rebuilding cost. After completing the survey, the surveyor will contact you to discuss the findings. A copy of their professional insurance is filed with the RPSA, and all surveys undergo stringent Quality Assurance.

For more details, visit [www.rpsa.org.uk] or call 08714 237189 to locate a surveyor near you.

The Royal Institution of Chartered Surveyors (RICS) offers three levels of survey:

Level 1 - RICS Condition Report: This is suitable for conventional homes in good condition, constructed with standard materials. It focuses solely on the property's condition, providing a 'traffic light' rating for each element.

Level 2 - RICS HomeBuyer Report: This is also for conventional homes but includes more comprehensive information. It identifies problems that could affect the property's value and highlights issues requiring further investigation.

Level 3 - RICS Building Survey: This is appropriate for larger, older, run-down, unusual, or modified properties. It is more costly due to the detailed information it provides on the structure and fabric of the building, outlining visible defects, potential hidden problems, repair options, and the implications of not addressing issues.

These surveys do not include a property valuation, but this service can be added for an additional fee. For further details, visit www.rics.org and click on the 'Home Surveys' link to explore the options available and locate a surveyor in your area.

If you have any questions regarding the above, please feel free to contact us.