Home buyers denied redress: The leeway allowed on house valuations is making it difficult to sue surveyors for negligence

HOME BUYERS whose surveyors fail to spot serious defects in their properties are being denied the chance to seek compensation, even though the cost of any repair work could run into many thousands of pounds.

In such cases, not only do owners have to prove the surveyor was negligent, they must also show that the defect would cut the price of the property by at least 10 per cent.

For unusual houses, where there are no comparable properties in the area, the allowable margin of error can be even higher - up to 20 per cent or more.

Ann Baden bought her detached two-bedroom house near Dorking, Surrey, for pounds 165,000 in May last year. Before doing so, she commissioned a pounds 500 structural survey from Clarke Gammon, a Guildford firm of chartered surveyors.

Ms Baden said: 'The report suggested that because both levels of the house are set directly into the hillside, there was a risk of damp. It also pointed out that there was some moisture in the walls, although the surveyor said that he had been unable to test further because of dry lining on the walls.'

Clarke Gammon's surveyor valued the house at pounds 165,000. In August last year, Ms Baden noticed there was heavy damp in parts of the house.

A second surveyor's report concluded: 'In view of the defects that exist, I would have expected any reasonably competent surveyor to have recommended that estimates relating to the remedial works be obtained before purchase of the property.'

Builders' estimates suggested that it would cost at least pounds 8,000 to cure the damp, while a separate valuation of the property said it was worth only pounds 158,000 when it was bought.

Armed with this information, plus a barrister's opinion to the effect that Clarke Gammon had been negligent, Ms Baden began legal proceedings against the firm. Whereupon she hit a brick wall.

Clarke Gammon's lawyers, Squire & Co, wrote to her solicitors: 'As a matter of law, any valuation between pounds 142,200 and pounds 173,800 would not have been negligent. Your client's case is wholly dependent on establishing loss - unless your client seeks to recover nominal damages only.

'Given that on your expert evidence, the property could reasonably have been valued at over pounds 173,000, we fail to see how your client can establish any loss in circumstances where she bought the property for pounds 8,000 less.'

Clarke Gammon, which has declined to refer the case to arbitration, refused to comment. However, Miss Clare Devitt, a lawyer working for Squire & Co, explained: 'Our clients totally reject any allegation that they were negligent in their survey of the property.' She said that had the matter gone to court it would have been possible to obtain expert opinion showing this was the case.

'In any case, a court would look at the question as to whether there was any harm suffered,' added Miss Devitt.

'Any loss suffered is if the buyer had overpaid on the property. Given that there is a margin of error of 10 per cent, the loss would have had to have been more than that amount for compensation to have been awarded.'

Ms Baden has now dropped her case against Clarke Gammon. She said: 'There is not much point in going to all that expense if the chance of winning compensation is virtually non-existent. I still feel that people should be aware of where they stand in such cases.'

Adrian Britton, director of the contract division at the Royal Institute for Chartered Surveyors, said: 'What courts have said is that to be negligent the figure has to be one which no reasonably competent valuer would have arrived at.'

Mr Britton added that the RICS does not take disciplinary action against its members in cases of proven negligence, although a consultative paper to this effect is now under discussion.

(Photograph omitted)