A seller should disclose all relevant information about the property to his buyer, but if he does not it will be very difficult for the buyer to prove that the seller deliberately withheld information from him. Furthermore, the law operates a “buyer beware” principle which means that it is for the buyer to satisfy himself that the property is structurally sound. Indeed, the law assumes that if the buyer has exchanged contracts he is happy with the state of the property; hence it is very difficult to persuade the courts to help the buyer who only discovers defects after completion, particularly where these could (and should) have been discovered prior to exchange of contracts.
Whilst most buyers find it tempting to rely on the mortgage lender’s valuation of the property this is rarely sufficient. Buyers should understand that a valuation is exactly that – a valuation – it is NOT a survey.
What is the distinction between the valuation and a survey- and why is it so important, anyway?
A valuation is prepared for the benefit of the mortgage lender to enable it to assess whether the property is good security for the amount of the mortgage loan. The valuer does not undertake a detailed inspection of the property and structural defects and faults may not be identified. Usually the valuation report will contain advice to the buyer that the buyer may not rely upon the contents of the report. In practical terms, this means that if the valuer fails to identify a significant problem with the property which only comes to light after completion, the buyer will have no legal remedy against the valuer and will not be able to seek compensation. The buyer has bought a problem and it will be the buyer who will have to pay to put the problem right. Mistakes do happen. Pity the poor buyers who moved in to their dream home only to find that the valuer had failed to spot that the seller had relocated the staircase in the property and left it balanced on two six inch nails.
It is for this reason that we recommend that buyers should give serious thought to having a detailed survey carried out by their own surveyor. The buyer will have a direct contract with the surveyor – and if things sadly do go wrong the buyer may be able to seek compensation for breach of that contract. However, on the assumption that the surveyor has done a good job – as of course most of them do – the buyer will know what defects exist and may be able to renegotiate on the price to help pay to put the defects right. Even if the surveyor reports that the property is structurally sound and in good order, the buyer should regard the survey fee as money well spent in purchasing the peace of mind that goes with knowing that all is well.
The buyer should also consider whether specialist reports might be needed from tradesmen who can check out the electrical wiring and the central heating or look for evidence of rising damp or timber decay.
Remember – it is the buyer’s job to be satisfied that the property is sound and good value for the price being paid.
We will assume that once a buyer authorises us to exchange contracts on your behalf that you are satisfied with the state and condition of the property and that you have carried out all inspections and surveys that you deem necessary.