Buying a property… then do not forget the survey
13 January 2016
Why you need a survey
Someone selling a house, does not have to tell you about any physical defects in the property. It is up to you, to find out as much as you can about the condition of the property by asking questions and commissioning reports. This is known as caveat emptor, which means ‘buyers beware’. Once the sale has taken place, the seller has no further responsibility towards the property.
A survey is an expert report, which should highlight any major physical defects in the property. It gives early warning of potentially costly structural problems. It should confirm the property’s real value, and help your solicitor establish that the legal boundaries match what is seen on the ground.
If your survey reveals serious defects, you may need to think carefully about your options. Your solicitor may be able to negotiate with the seller to put things right, or reduce the purchase price. If not, you may decide to walk away from the purchase altogether.
The limits of a valuation
If you are taking out a mortgage, your lender will value the property. They will usually let you have a copy of their valuation. However, prudent borrowers should not rely upon this alone.
Lenders just want to know that the property is adequate security for the mortgage loan. Most valuations will not give you enough information to make an informed decision. For example, your lender may not care about rising damp in your kitchen, provided the property is still worth more than the amount you are borrowing.
Choosing the right survey
The Royal Institute of Chartered Surveyors has three levels of survey:
- the condition report – this is the cheapest type of survey. It uses a traffic light warning system and is easy to understand. It focuses on the basic condition of the property. It does not include a valuation but your surveyor may agree to provide one for an extra fee;
- the home buyer’s report – this is more expensive, but also more comprehensive. It involves a detailed inspection, a valuation and a reinstatement estimate for insuring the property; or
- a full building survey – this will give you the most comprehensive report on the structure and fabric of your property, but it is also the most expensive.
Your solicitor can help you choose the right survey taking into account your budget and the type of property you are buying. They will also know about any local concerns, or title issues, that could be relevant.
Your solicitor may ask your lender about a combined survey and valuation, on your behalf. This could save you time and money, as an approved surveyor will carry out the mortgage valuation and your survey at the same time.
A survey may reveal problems that need further investigation such as evidence of subsidence, the roof spreading, damp, asbestos or red ash. Rectifying these could be expensive.
Your solicitor can advise if you need to get a specialist report. For example, in the case of suspected subsidence, a structural engineer can assess the risk of further movement and the likely cost of any remedial work.
Specialist considerations for old and new properties
If you are buying an older property, your solicitor can help you find a surveyor who understands historic building techniques. They will also liaise closely with the surveyor to ensure that the building complies with heritage, listed buildings and conservation legislation.
New build properties can raise special issues too. You may not need a full survey if the developer is providing structural defects insurance. However, a snagging survey may save you money and time. It will pick up problems like incorrect plumbing or poor plastering. Developers are often more willing to correct defects quickly before you have paid them the purchase monies.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.