SURVEYING
ALAN MILSTEIN, CHAIRMAN, RESIDENTIAL PROPERTY SURVEYORS ASSOCIATION (RPSA)
EDUCATING BUYERS? While we are increasingly aware of the concerns around the lack of surveys being commissioned by today’s buyers, the question remains, whose responsibility is it to educate the buyer? Should it be the Government, through
some form of awareness raising campaign or newly introduced mandatory requirement? Or the lender, who should be flagging up to its borrower that the valuation they have sent through, is not and does not constitute a full condition survey? Perhaps it should be the mortgage broker, who will be in regular contact with the borrower in the early stages of the process and could highlight the merits of a survey when they make their recommendations? Or indeed the conveyancer, who upon appointment should ask the question and ensure their client knows the difference between the mortgage valuation and a proper survey of the condition of the property? Or what about the estate agent, who will be dealing with the buyer first hand and could flag this up to them early on in the process? Well, a recent survey of our members
suggests that the majority of residential property surveyors believe that the responsibility should lay with the conveyancer. While some members also felt that the lender and the mortgage broker had a role to play in educating the consumer, it was clear from our quick fire poll that very few believed that it should be the responsibility of the estate agent to make sure that the buyer is aware of the survey options available to them – a conclusion that I strongly support.
22 JULY 2012 PROPERTYdrum
WHO’S RESPONSIBLE FOR
DON’T BLAME THE AGENT When discussing this very issue, I regularly hear people suggest that it should be the agent, dealing first hand with the buyer, who should be advising them about the survey options available to them, but this just doesn’t make sense. Those that try to place the responsibility at the door of the agent totally misunderstand the very premise of the estate agent’s role. Of course you are there to assist consumers with the buying and selling of a home and will be in regular and typically direct contact with both the buyer and seller throughout the process. However, what needs to be remembered is that first and foremost, your responsibility lies with the seller, not the buyer. After all, it is the seller that will have instructed you and the seller when the transaction completes, that will be paying your fee. Some people in our industry seem to forget that as an agent you are working on behalf of the seller, so to suggest that you should recommend to a buyer that they purchase a survey report, which they could later use to pull out of the transaction or negotiate down the price they had previously agreed is ludicrous.
THE ROLE OF THE CONVEYANCER
In contrast, the conveyancer will be working on behalf of the buyer and as such, is in a much better position to be advising them on matters relating to surveys and the options available. When referring to the Council of Mortgage Lenders (CML) handbook, it appears that this too supports the premise that it should in fact be the conveyancer that takes responsibility for advising the buyer of their options, as lenders quite cleverly pass the buck. The Council of Mortgage Lenders handbook includes the following clause:
4.4 When a home condition report is not
provided we recommend that you should advise the borrower that there may be defects in the property which are not revealed by the inspection carried out by our valuer and there may be omissions or inaccuracies in the report which do not matter to us but which would matter to the borrower. We recommend that, if we send a copy of a valuation report that we have obtained, you should also advise the borrower that the borrower should not rely on the report in deciding whether to proceed with the purchase and that he obtains his own more detailed report on the condition and value of the property, based on a fuller inspection, to enable him to decide whether the property is suitable for his purposes.
This clearly places the onus on the
conveyancer to ensure their client understands that a lender’s valuation is not a survey, while the lender alleviates itself from all responsibility. However, this message doesn’t seem to be getting through and it seems that conveyancers may be exposing themselves to potential risks in respect of this obligation.
A SUGGESTED WAY FORWARD
At RPSA, we have recently tested a new approach with conveyancers. To ensure that clients make an informed choice about obtaining a survey we have been urging conveyancers to include the following three bullet points, immediately above where the client signs the letter of engagement, requiring the client to tick one of the following boxes, I will arrange my own survey (I understand that my lender’s
valuation is not a survey) Please arrange a survey for me
There may be defects which are not revealed by our valuation.’
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