Phantom house survey

georgekaplan

Any retired surveyors (or bankers) on here? Five years or so ago, a friend bought a house in Chapel-en-le-Frith, Derbys, with a loan from HSBC. The bank's survey (among other things) said NO SUBSIDENCE. Recently, he has been doing some renovations and invited a structural engineer around to check something. The engineer immediately spotted historical subsidence in one part of the house. When my pal approached HSBC, they said (to his surprise) that the survey had been a "desktop survey" so nobody had actually been to the house and that they were not liable for any structural faults because the survey was really for their eyes only to see whether the bank should make the loan or not. Does anyone have any thoughts on this? OK, in hindsight my friend should have organised and paid for a full structural survey. But he was under the opinion that if any fault or faults existed they would be spotted by the surveyor. (He wasn't living in the house at the time). He didn't presume for a moment that a surveyor wouldn't leave his office. Thoughts?

Hoenir

georgekaplan said:

The bank's survey (among other things) said NO SUBSIDENCE.

If it's turned out to a desktop valuation and not a survey. Then that's somewhat improbable. As no detailed report would be given to the potential borrower. What did the property enquiries state at the time of purchase? 

user1977

georgekaplan said:

they said they were not liable for any structural faults because the survey was really for their eyes only to see whether the bank should make the loan or not. Does anyone have any thoughts on this?

That's an entirely accurate statement. He should have got his own survey. But apparently he chose not to.

BarelySentientAI

georgekaplan said:

Any retired surveyors (or bankers) on here? Five years or so ago, a friend bought a house in Chapel-en-le-Frith, Derbys, with a loan from HSBC. The bank's survey (among other things) said NO SUBSIDENCE. Recently, he has been doing some renovations and invited a structural engineer around to check something. The engineer immediately spotted historical subsidence in one part of the house. When my pal approached HSBC, they said (to his surprise) that the survey had been a "desktop survey" so nobody had actually been to the house and that they were not liable for any structural faults because the survey was really for their eyes only to see whether the bank should make the loan or not. Does anyone have any thoughts on this? OK, in hindsight my friend should have organised and paid for a full structural survey. But he was under the opinion that if any fault or faults existed they would be spotted by the surveyor. (He wasn't living in the house at the time). He didn't presume for a moment that a surveyor wouldn't leave his office. Thoughts?

Surveyor working for the bank is only liable to the bank and likely instructed only to check that the house was valuable enough to repay the loan if repossessed.

Your friend has misunderstood the remit of the surveyor and who the surveyor's client was.

Schwarzwald

georgekaplan said:

Thoughts?

Yes:
Your pal is entirely at fault here for not having done his home work and cannot offload accountability for his own mistakes to the bank.

Nuff_Said

I’m a bit late to this party, but if there was historical subsidence, shouldn’t this have been known to the owners and listed on the Property Information Form? There’s no case against the surveyor/bank but possibly one against the vendor.

user1977

Nuff_Said said:

I’m a bit late to this party, but if there was historical subsidence, shouldn’t this have been known to the owners and listed on the Property Information Form?

Why would they have known about it, given the current owner didn't?

And yes, very late to the party, given it's 15 months since the OP last logged in here...

GDB2222

user1977 said:

georgekaplan said:

they said they were not liable for any structural faults because the survey was really for their eyes only to see whether the bank should make the loan or not. Does anyone have any thoughts on this?

That's an entirely accurate statement. He should have got his own survey. But apparently he chose not to.

It’s been the law, at least in England if not Scotland, since the 1980s that the bank’s surveyor has a duty of care to the home buyer. There was a case of Yanni vs Edwin Evans, and then upheld by the HOL (Supreme Court) in Smith v Eric S Bush.  Are you saying that those cases have been overturned, then?

I don’t suppose that can extend to the surveyor needing to do a more extensive investigation than he was instructed to do, though. 

user1977

GDB2222 said:

user1977 said:

georgekaplan said:

they said they were not liable for any structural faults because the survey was really for their eyes only to see whether the bank should make the loan or not. Does anyone have any thoughts on this?

That's an entirely accurate statement. He should have got his own survey. But apparently he chose not to.

It’s been the law, at least in England if not Scotland, since the 1980s that the bank’s surveyor has a duty of care to the home buyer. There was a case of Yanni vs Edwin Evans, and then upheld by the HOL (Supreme Court) in Smith v Eric S Bush.  Are you saying that those cases have been overturned, then?

No, but it's not much help relying on that principle if (as in this case) the bank didn't even instruct someone to visit the property.

Herzlos

Remember that the duties of care will overlap too. Any reason the bank would have not to lend would probably impact the buyer such as identifying subsistence. 

I've got questions though:

How obvious was the subsistence, and would that have been obvious when the house was purchased? For example, did he only see cracks because it's been stripped back to brick in a renovation?

What does the actual report from the banks surveyor say? Because a desktop survey (and potentially a real survey) wouldn't say something as definite as "NO SUBSISTENCE". It might say something like "No evidence of subsistence" which isn't the same thing. 

Smalltownhypocrite

A bank is a 'valuation survey' and is only to verify the 'value' of the house. Its done through historic sales and market statistics and is to make sure they don't over lend on something not worth that amount (in case they need to repossess and to stop fraud or unmanageable market growth etc...). 

It has NOTHING to do with the condition/history of the house, the onus is entirely on the buyer to view the property and organize either a condition report, home buying report or structural surveys.