Hart v Large – significant damages awarded for surveyor negligence

In the recent case of Hart & Hart v Large & others, the High Court awarded significant damages to a couple who had relied, in purchasing a £1.2m property, on a HomeBuyer report produced by a surveyor.

The property, located in rural Devon, was originally a bungalow built in the 1920s. In around 2009, it underwent significant reconstruction and extension, before being marketed for sale in 2011. The claimants, Mr and Mrs Hart, made an offer to purchase the property, and appointed a surveyor, Mr Large, to carry out a survey on the property.

Potential purchasers can opt for three different forms of report when buying a house:

• A basic valuation. If buying with a mortgage, this will usually be arranged by the lender and offers little to no protection to the purchasers.
• A HomeBuyer report. This includes both the surveyor’s opinion on the market value of the property, but also basic advice on any repairs which may be required or issues which may need to be investigated. It is not as detailed as a full survey, and is intended to be more of a budget option. The report is produced in a standard format and uses a ’traffic light’ system to assess the condition of different aspects of the property.
• A full building survey. This is more extensive and is typically recommended for older or more run-down properties, those which have undergone significant renovation or structural changes, or high value properties.

Mr Large recommended to the Harts that he should prepare a HomeBuyer report, and they accepted this recommendation.

Following his inspection, Mr Large produced his report, which valued the property at £1.2m and highlighted only two issues of concern – one ‘red’ item in respect of drainage, and one ‘amber’ item in respect of pipes and gutters. He did not identify any issues in relation to damp or water ingress.

The Harts proceeded with the purchase and moved into the property in November 2011. However, they quickly began to experience problems with water ingress. In particular, there was severe leaking through doors and windows, and through the ceiling of a ground floor sun room. Throughout 2012 and 2013, numerous professionals were engaged to try and resolve the problems, before the Harts were eventually advised, in 2014, that there were very significant structural problems with the building and that it required extensive remedial work.

The Harts brought a claim against Mr Large, alleging that he was negligent in (1) failing to advise them to have a full building survey carried out, and (2) in failing to identify the significant damp problems at the property in carrying out his inspection for the purpose of producing the HomeBuyer report. They also brought claims against their conveyancing solicitors and the architects who had supervised the renovation.

In considering the first allegation, the court decided that, having advised clients to choose a HomeBuyer report, a surveyor has a continuing obligation to keep that advice under review, both during and after producing their report, if it transpires that a more extensive full building survey is required.

In relation to the second allegation, the court accepted Mr Large’s evidence that he had taken damp readings during his inspection and that there was no evidence of damp at the time. However, Mr Large had noted in his inspection that because the walls of the property had been rendered, he could not see whether or not damp proof membranes had been installed. The court found that he should have highlighted this to the Harts and recommended further investigations to establish this.

Finally, the court said that given that the property was newly renovated but would not have the benefit of an NHBC warranty, as brand new buildings do, Mr Large was negligent in failing to recommend that the Harts seek a Professional Consultant’s Certificate from the architects responsible for redesigning the property.

Having determined that Mr Large had been negligent, the court went onto consider the damages to be awarded to the Harts. It awarded them £750,000, being the difference between the value of the property as it had been reported to them in the HomeBuyer report, and its value with all of the defects which actually existed. £374,000 of this sum was to be borne by Mr Large, the balance having been paid by the Harts’ solicitors and the architects in a separate out-of-court settlement.

The court also awarded £15,000 to compensate the Harts for the distress and inconvenience they had suffered.

This case is a notable decision for surveyors, both in relation to the scope of their duties and how damages for negligence are to be assessed. Surveyors will need to consider, in particular, their duty to recommend a full building survey (and record that they have done so) where it becomes apparent, during the course of an inspection, that the cheaper option of a HomeBuyer report is not suitable.