Adrian Kwintner puts the art of property valuation under the spotlight
The most recent cases on negligence claims against property valuers endorse courts’ longstanding view that the valuation process is subjective and there will be a permissible range (“margin of error”) within which competent valuations may fall. They also confirm that judges will scrutinise a valuer’s methodology whether for a modern flat (Paratus AMC Ltd v Countrywide Surveyors Ltd [2011] EWHC 3307 (Ch)) or a shopping centre (Capita Alternative Fund Services (Guernsey) Ltd v Drivers Jonas [2011] EWHC 2336 (Comm)). But a low fee may limit a valuer’s obligations.
The starting point for investigating whether a valuation is negligent is determining the “correct valuation” at the relevant time. For this task, courts will examine the valuer’s methodology and expert valuation evidence. Generally, once a court has determined the retrospective valuation, it will prescribe a margin either side of this figure within which a competent valuation may fall. If a valuation falls outside the margin, the valuer can in theory still escape
