Hart v Large  EWHC 1302 (TCC) highlights important issues for surveyors surveying and valuing a property for a prospective purchaser. It also serves as a warning to surveyors not to assume that a property will be generally free from defects where it has recently undergone very extensive reconstruction involving other experienced professionals.
The judge noted that it is rarely necessary for a purchaser of a newly-built house or flat to commission a surveyor’s report, since in the vast majority of cases there will be an NHBC guarantee or similar protection available to the purchaser. Those refurbishing or reconstructing properties are likely to be owners, hoping to occupy the newly refurbished or reconstructed property, and will usually have the benefit of direct contractual relationships with the contractors and professional advisors. The case highlights the need for a surveyor to recognise the risk a purchaser is taking on in the circumstances, and the judge found that the role of a surveyor dovetails into the role of the conveyancing solicitor to ensure that the purchaser has the total package of advice and protection that the purchaser needs.
The property in this case was a bungalow built in the 1920s or 1930s, standing in a dramatic position on the coast with magnificent coastal views, which underwent significant renovation around 2009. The claimants, Mr and Mrs Hart, appointed a surveyor, Mr Large, to carry out a survey on the property prior to purchasing it in 2011 for £1.2m.
Unfortunately, after completion, the Harts began to experience a number of problems, most notably with water ingress and damp. They were advised that there were very significant structural problems with the building and that it required extensive remedial work.
The Harts brought claims against Mr Large, as well as their conveyancing solicitors and the architects who had supervised the renovation. The latter two claims settled, leaving the claim against Mr Large to be heard by the court. The Harts alleged that Mr Large was negligent for failing to:
In respect of the first allegation, the expert giving evidence conceded that it was not necessarily wrong for Mr Large to have recommended a HomeBuyer report rather than a building survey, but the court found that a surveyor has a continuing obligation, having advised that a HomeBuyer report is appropriate to keep that advice under review:
With regards to the second allegation, the court found that Mr Large had been negligent as he had made an assumption that the damp proofing provisions at the property were adequate without having been able to visually inspect them, and therefore did not recommend further investigation. He was lulled into a false sense of security by reason of the recent involvement of professionals and the absence of any obvious signs of damp.
Finally, it was held that, in view of Mr Large's reliance on the involvement of the architect when coming to conclusions about the state of the property, and given the apparent signs of faulty workmanship, he should have advised that obtaining a PCC was essential. The court found that had Mr Large provided proper advice, the Harts would have pushed harder to ensure that they had the PCC in their hands prior to instructing their conveyancing solicitor to exchange contracts, and if they been made aware of the significance of the PCC by Mr Large, they would certainly have withdrawn from the purchase had no PCC been forthcoming.
The court had to consider whether the damages in this case should reflect:
The court opted for the latter approach, on the basis that Mr Large's failure to emphasise the importance of obtaining a PCC deprived the Harts of protection against the presence of unidentifiable defects from which they might otherwise have benefited.
The Harts were awarded £750,000 for loss in value plus £15,000 for distress and inconvenience.
To protect a prospective purchaser of a renovated property, a surveyor should:
The 110-page judgement is long but easy to read and I recommend every surveyor (and conveyancer) who works in this area reads it.
Related competencies include: Purchase and sale, Valuation