PROPERTY JOURNAL

Opinion: who to tell about your surveys?

Should surveyors discuss their findings with anyone other than their client? And if so, under what circumstances?

Author:

  • Wayne Norcliffe

26 March 2021

As an RICS Fellow who has practised in both the residential and commercial property sectors, I have heard a variety of opinions on the question of who you can tell about your findings. Those who obtain work from estate agents or other third parties seem to be more willing to discuss their findings with people other than their clients, while those who work directly for buyers generally seem to be of the opposite opinion.

It seems a simple point, but it is worth emphasising that a surveyor's primary duty is to their client. That relationship – along with information gathered as a result of it – must be treated as confidential unless agreed otherwise, preferably in writing.

Duty to the client

Under the heading "Ethical behaviour", the current edition of the RICS Rules of Conduct for Members, which took effect from 2 March 2020, says: "Members shall at all times act with integrity and avoid conflicts of interest and … any actions or situations that are inconsistent with their professional obligations." Meanwhile, under "Service", it says: "Members shall carry out their professional work in a timely manner and with proper regard for standards of service and customer care expected of them."

Confidentiality and customer care are the considerations most relevant to the question of who you can tell about your findings. Section 2 of the current edition of the Conflicts of interest RICS professional statement clearly sets out requirements on confidentiality, saying: "RICS members and regulated firms must maintain [the] confidentiality of confidential information unless disclosure is required or permitted by law, or the RICS member or regulated firm concerned can demonstrate that the relevant party consented to the disclosure before it was made."

Although confidential information is not defined further, information that comes into your possession because of your instructions from a client would normally be regarded as confidential, along with any advice you give them. The standards are clear that you can normally only disclose this to another person if your client consents to your doing so. As such, conversations with estate agents or vendors where you disclose your findings without your client's consent are likely to fall outside your professional duty. This could result in a claim against you, or RICS taking action if a complaint is upheld.

Mind your language

The importance of maintaining confidentiality can be seen by considering why an estate agent or vendor wants this information from you, and what they might use it for. For example, a surveyor inspects a property for an RICS Level 2 HomeBuyer Report and finds some missing roof slates. As it is a Victorian house, repairing this is not likely to be too onerous, and the surveyor wouldn't expect the client to withdraw from a purchase for such an issue. They are merely going to advise their clients to undertake works.

Afterwards, in the course of their interactions the vendor or estate agent ask the surveyor whether there are any problems with the property. Not wishing to be rude and feeling the need to be helpful, the surveyor replies that there is nothing too serious.

This response may seem innocuous, but let us consider the potential outcomes. First, unless they have discussed in detail what their client does and does not consider serious, then how can the surveyor know that missing roof slates are not a problem? Perhaps the client has had similar issues in the past that caused dampness and timber decay, so they are now unwilling to purchase a property with such defects or perhaps they have pushed the boundary on their purchase price so can't afford to undertake such works.

Furthermore, informing the vendor or anyone else without the client's consent would be a breach of confidentiality. As such, the surveyor should avoid sharing their client's confidential information with anyone but the client.

Second, you must consider the potential outcome from different perspectives. The vendor hears an assurance that there is nothing too serious and decides to push ahead with their sale. They put down a deposit on a new property, begin conveyancing and so on, expending monies as a direct result of what they considered to be verbal advice.

In addition, an estate agent could in theory tell other buyers that the property is off the market, potentially putting their commission at risk if the surveyor's clients do not conclude the purchase as a direct result of the survey and its findings.

Even if there is likely to be no legal liability, the surveyor may find themselves having to deal with time-consuming complaints that will have to be reported to the provider of their professional indemnity insurance, or they may have to pay should a vendor decide to complain to the Property Ombudsman.

Third, from a client's perspective, the surveyor has informed the vendor and estate agent that there are no serious issues. This has potentially undermined the client's negotiation position, as they may have chosen to say that defects are present – even though there may not be – and use that conversation to obtain a price reduction. Such a conversation is likely to be more difficult or impossible when the vendor and estate agent have been forewarned.

Personal experience

I myself have had a similar experience. After surveying a property I returned the keys to the estate agent, who asked, "Did everything go all right?" I simply replied, "Yes, fantastic." I meant this in respect of the access provided, not confirming or implying anything about the condition of the building or my findings. I discussed the report with my client, who decided to renegotiate the price based on defects found.

When my client approached them, the agent expressed surprise, telling my client "Your surveyor said the bungalow was fantastic." Now this was patently incorrect, but the agent's decision to bend my words to suit their purpose could have resulted in my client finding their negotiations more difficult. Just imagine if the estate agent or vendor had been informed of specifics, or told the property was fantastic or otherwise free from serious defect, how much more could that have adversely affected my client's position?

Seemingly innocuous comments can therefore have a significant impact on the client, the surveyor, the vendor and the reputation of the profession generally. I mention the latter because when surveyors disregard the rules under which we have to work, it affects all of us who do our best to follow those rules as well as undermining public confidence in our profession.

The answer to the original question, then, is simply to tell no one other than the client about your findings; unless of course you have their approval, so as to provide a reasonable defence if challenged later.

Could a client claim for their losses in such circumstances where a surveyor chooses to ignore this approach? I believe they could. In any event, as a practising surveyor, I would rather avoid having to deal with a complaint, pay for ombudsman determination and possibly waste time in court just to prove there is no claim, so I adopt the approach of politely declining to comment.

If that doesn't work – and it often does not – I go on to say I do not know the answer, because every client is different and what concerns one may not concern another. After all, that is as true a statement as can be made.

So the moral is simple: loose lips sink ships, or in this case, surveyors. Be careful out there.

"Seemingly innocuous comments can therefore have a significant impact on the client"

www.castle-surveyors.co.uk

enquiry@castle-surveyors.co.uk

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