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Lender Valuations

When applying for your mortgage you will have paid to the prospective lender a sum to be used to assess the value of the house, and in turn, how much they will lend to you. It has been common, but wrong, to describe these 'valuations' as 'the building society survey'. You should recognise two distinct limitations which apply to the valuation.

First, you appear to be paying for it, but you are not. You merely indemnify the lender against the cost of his getting the valuation. The lender instructs the surveyor, and you pay the lenderís costs. The valuer reports to the lender only. He has no direct contract with you, and accepts no duty to you. The situation is slightly different where the lender employs their own in-house valuers.

In any event and in most types of cases, though you will have been shown a copy of the valuation, you are not to rely upon it. If there is an error, neither the lender, nor the valuer will wish to accept any responsibility to you. They each say you should have your own second and independent survey. This may not always be the case, but you should start out assuming that it is.

The second major limitation is that it is a valuation, not a survey. The person inspecting the property does not assess the propertyís condition or soundness, except only in the most general of senses. The valuer may make one or two comments on the condition of the property which sound as if the valuer has carried out a survey, but he has not done so.

There are surveys which you can organise yourself (or sometimes through the lender) which will give you much more information about the property, and it is always wise to arrange for such a survey. Sometimes the lender will arrange this service for you, and will then accept the valuation as part of this survey. Though you pay more, this method ensures you pay less than for two separate surveys. There are different kinds of surveys. The more you pay, the more detailed is the survey.

We can arrange further surveys for you and will be pleased to advise you separately about this. We always recommend that you should do so.

Important: Please note that our law-bytes are retained for archival purposes only. The law changes, and these notes are often, now, out of date. You must take direct advice on your own personal situation and the law as it currently stands.
All information on this site is in general and summary form only. The content of any page on this site may be out of date and or incomplete, and you should not not rely directly upon it. Take direct professional legal advice which reflects your own particular situation.
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18 October 2013 4 18 October 2013