Case Studies
The solicitor bought the wrong flat for a buy to let client.
Mrs D looked at and agreed to buy a ground floor flat, valued at £325,000. The solicitor actually bought for her a first floor flat in the same development worth £165,000, and Mrs D paid £325,000 for this flat.
The building society, who had provided a mortgage based on a valuation of the ground floor flat advanced to Mrs D a mortgage of 80% of £260,000. Mrs D to claimed £160,000 (being £325,000 – £165,000) from the solicitor.
A Surveyor fails to identify a defect in a property.
Mr E engaged a surveyor to conduct a full structural survey on a house he wanted to buy.
The survey revealed no problems. Mr E bought the house. Later Mr E realised there was a problem with a wall. A builder recommended further investigation.
Another surveyor advised that there were severe problems with the wall that were present at the time of purchase. Mr E paid for remedial work. He advanced a case saying that if he had received notice of this defect he could have bought the house at a cheaper price.
Mr E claimed for the loss of a chance.
Surveyors negligence in the buy to let market by overvaluing properties and solicitors negligence in failing to advise a client about a secret profit for the agent and unsuitability of a mortgage product.
Mr F wanted to join the property boom in 2006.
He contacted an agent Mr V who said he could locate suitable properties. Mr V said he had located a property (the property) at a price of £250,000 and that he had found a tenant at a rate of £1000 per month AND that he would guarantee that rate for 1 year so that Mr F could afford his mortgage).
Mr V was paid £6000 for locating the property.
Mr V said to Mr F he could get a discount on the property of £50,000 so that the £200,000 mortgage he got would be all he would have to pay apart from V’s £6000.
Mr V recommended a surveyor – Mr W
Mr V recommended a financial adviser – Mr X (he organised a self certification mortgage)
Mr X recommended a Financial institution for the Mortgage – The Y Bank
Mr V recommended a solicitor – Mr Z
Unbeknown to Mr F (but known to Mr V) the property was available at a price of £120,000. Mr W surveyed the property and valued it at £250,000 (evidence has been obtained that in 2006 the property was worth £120,000).
Mr X advised Mr V to take out what the Financial trade called a HONEY TRAP mortgage (a great rate for 2 years but with penalties for early repayment and then escalating to a rate that Mr F would find difficulty paying).
The Y Bank were happy to provide the Honey Trap mortgage and with Mr V’s assistance sold Mr F a PPI policy (personal protection insurance) so they could get a commission and advanced Mr F 80%. The solicitor, Mr Z failed to tell Mr F that there was a sale and sub sale on the property and failed to tell Y Bank about the discount.
In a world of escalating prices everyone was happy.
Then came the credit crunch. The property is now untenanted, the value is £100,000 and Mr F can not afford the mortgage.
Mr F has actions against; the solicitor (Mr Z), the agent (Mr V), the surveyor (Mr W), the financial adviser (Mr X) and the Y Bank.