How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Stuart J Your Own Question

Stuart J
Stuart J, Solicitor
Category: UK Law
Satisfied Customers: 20067
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
11292137
Type Your UK Law Question Here...
Stuart J is online now
A new question is answered every 9 seconds

I have a property developer client who was lent too much money

Resolved Question:

I have a property developer client who was lent too much money to build a house. The chartered surveyor from Berkeley Square, London valued the property "finished" at £1.75m in April 2012. The property was eventually finished this year.. long story... however guide price recommended by two estate agents came in at £1.35m/£1.4m. The sale of the property fell through last week, sale price £1.275m. The interest on the loan is £18,000 per month, added each 20th of the month. It is virtually mathematically impossible to sell the house and pay off all debts including the lender. Is the chartered surveyor acting on behalf of the bank liable to losses incurred by my client on lending that should not have occurred in the first place?
Submitted: 1 year ago.
Category: UK Law
Expert:  Stuart J replied 1 year ago.

Hello, I am Law Denning and I am a practising solicitor in a High
Street practice. I have been an expert on this website in UK law since 2008.
During that time, as you appreciate, I have answered thousand's of questions from satisfied users on a variety of subjects.
Because we are all in practice with clients and court and other users, I might not always respond in
minutes, particularly evenings and weekends. Please bear with me in that case.

It is my pleasure to try and assist you with this today. Please bear with me while I gather some further information from you in order for me to be able to advise you fully.

Why do you believe it is his responsibility?
Customer: replied 1 year ago.

He is responsible to give a red book valuation for bank borrowing purposes, unfortunately, he was 40% over, and as result my client has lost substantially


 

Expert:  Stuart J replied 1 year ago.




Client?
What is your interest in this? Who is your client? The developer?

Is he
an experienced developer or is this the first time?



When
was the valuation done which valued is 1.75 million? Has the market dipped in
between the valuation being done and the property being finished?






I'm
going to be brutally honest with you and tell you that whilst the surveyor may
or may not have been negligent with regard to over valuing the property. The
actual value of it and what it can achieve in a depressed market can often be
remarkably different.

If
your client had no experience of this, I think that he may have a chance
against the value or the lender for irresponsible lending. However, I think
that in this case, I am sorry to have to tell you that I simply think your
client is himself a bad bargain and is now looking to offload the blame onto
someone else. That is not to say the solicitor will not take this on (and
obviously charge for the privilege) but I would be very surprised if it got to
court and I would be even more surprised if it was successful in a claim
against the surveyor.



I'm
sorry, I appreciate that this is not the answer you wanted but there is no
point in me misleading you. I have a duty to advise you truthfully and honestly
even if that answer is unfavourable.



Of course,
a different law you may take a different view because there are always two
sides to every argument. No one ever goes to court expecting to lose and yet
one side always does. Each of them has been encouraged to go by their solicitor
(who gets paid regardless) on the promise that they have a reasonable chance of
success.



By all
means intimate a claim against the surveyor it is not one that I would be
taking to court unless the solicitor acting for me is doing it no win no fee
and my legal costs are insured, in case I lose and get a costs order against me.



I can
see that this legal battle could easily cost £50,000 if your client lost the
case



Does
that answer the question? Can I help further? Can I answer any specific points?



Please don't forget to
positively rate my answer service even if it was not what you wanted to hear. You
should now see a series of buttons which enable you to rate my answer service
formally.

If you don't rate it positively, then the site keep your deposit and I get 0
for my time. It is imperative that you give my answer a positive rating.

It doesn't give me, "a pat on the head", "good boy" (like ebay), it is my
livelihood!

If in ratings you feel that you expected more or it only helped a little,
please ask.

The thread does remain open for me to answer follow-up questions after rating
my answer service.




Customer: replied 1 year ago.

Dear Law, I'm sorry I was called to a farewell supper and had to leave you.


 


Everything you say makes absolute sense. I might need to reflect overnight to see if there is possible foothold or case where we can get some sort of compensation. If we can prove that my client had relied on the valuation and was seduced by the price suggested which is understandable, then of course he would have been extremely happy. He is inexperienced on valuations and lives in a "Peter Pan world" so clearly would have been reliant on these sums.

Expert:  Stuart J replied 1 year ago.
No worries. He has better claim if this is his 1st development.
If he has done several, it severely weakens what is already not an easy claim
Customer: replied 1 year ago.

Dear Law, thanks for your assistance, I'll explain this to him tomorrow. Is there any case law to support his position?

Expert:  Stuart J replied 1 year ago.
Researching extensive case law is something which barrister will charge £250 per hour for because it takes a considerable length of time. The only time that we quote case law is in it springs off the top of our head.
There is one case which I seem to remember (and I might have this wrong), one of the party’s name was Jones. They were a first-time buyer and relied on the valuation (rather than a survey) of the house they were buying. It turned out that the was a problem with the house and it wasn’t worth what the value was said. That was why the judge found in their favour and he said that if they had been experienced buyers, they would have had no claim.
It might be an idea to print off the thread and show it to your client and then you can point out that this is a completely independent view and not your own.
Please don’t forget to rate my answer positively, if you have not done already. Unless you rated positively, I don’t get paid!
The thread does remain open for us to continue. Thank you
Customer: replied 1 year ago.

Dear Law, your advise has been very helpful. I am going to suggest that the lender (it's a private lender outside of FSA regulations) take's the hit so that the creditors on the house, agents and lawyers fees can be paid. The shortfall can be made up by the surveyors insurance company. The developer is inexperienced on new builds and is numerically dyslexic. If the lender had checked his credentials thoroughly, they'd have realised he was a high risk.

Expert:  Stuart J replied 1 year ago.
You have just given me a little more information which possibly weakens his case even more. I’m sorry but I will have to mention it. It is a Private lender outside FSA regulations.
I assume that the lender does have a consumer credit licence if this is a commercial transaction and not one between friends. If it is between friends, I don’t think he has a case against the lender although there is a possible one against the value. If it is a commercial transaction and the lender has no consumer credit licence, the transaction is illegal and therefore not enforceable legally, although that does not mean that the valuer is not liable
In exactly the same way that your developer client is not experienced at this, it may be that the lender pleads inexperience also in which case, the lender may have a possible claim against the value and indeed, a bigger claim than an ordinary lender would have.
Remember that your client is presumably a private individual whereas the lender may have and the valuer will certainly have professional indemnity insurance to fight any claim. It may therefore be that your client is up against unlimited funding by an insurance company whereby they will spin any litigation out as long as possible. Your client therefore needs to consider how he is going to fund any litigation.
This is going to be an extremely complicated case before actually proceeding with any litigation, I would pay the £800 or so that it would cost to get an advice from Chancery Counsel on the likely chance of success. I would do that before wasting any money on correspondence between solicitors because solicitors do tend to play legal ping-pong with correspondence, which massages the legal costs, before actually getting straight down to the nitty-gritty.
Stuart J, Solicitor
Category: UK Law
Satisfied Customers: 20067
Experience: PGD Law. 20 years legal profession, 6 as partner in High Street practice
Stuart J and other UK Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick Leeds, UK
< Last | Next >
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick Leeds, UK
  • I did not know a French Law service existed and I was very impressed with the speed of reply --- very professional. Many thanks! Ms. Baker Alfafar, Spain
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie USA
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin Kernersville, NC
 
 
 

Meet The Experts:

 
 
 
  • Ben Jones

    Solicitor

    Satisfied Customers:

    8364
    Specialist in UK Law with expertise in UK Employment Law
< Last | Next >
  • http://ww2.justanswer.com/uploads/venkoj/2010-02-20_133027_ben_pic.jpg Ben Jones's Avatar

    Ben Jones

    Solicitor

    Satisfied Customers:

    8364
    Specialist in UK Law with expertise in UK Employment Law
  • http://ww2.justanswer.com/uploads/CH/chathamchamber/2011-4-24_191833_1.64x64.jpg INC's Avatar

    INC

    Solicitor-Advocate

    Satisfied Customers:

    3850
    LL.B, Pg.Dip, LL.M, M.B.A (Pending), Solicitor-Advocate. UK Practising Certificate issued by SRA., DIFC Courts Registered (Dubai)
  • http://ww2.justanswer.com/uploads/taratill/2010-03-09_111600_phpsik04M_c2AM.jpg Jenny Mackenzie's Avatar

    Jenny Mackenzie

    Satisfied Customers:

    2612
    Over 10 years experience in general legal matters
  • http://ww2.justanswer.com/uploads/matthewjones/2009-9-7_20342_picture_007.jpg Matthew J's Avatar

    Matthew J

    Solicitor

    Satisfied Customers:

    323
    4 y PQE (Partner) - Commercial / Residential Property & Property and Civil litigation experience
  • http://ww2.justanswer.com/uploads/TO/touchwoodsden/2013-12-6_91518_MeforJA.64x64.jpg Stuart J's Avatar

    Stuart J

    Solicitor

    Satisfied Customers:

    5198
    PGD Law. 20 years legal profession, 6 as partner in High Street practice
  • http://ww2.justanswer.com/uploads/RE/Remus2004/2012-4-22_93111_2bigstockPortraitOfConfidentFemaleL6943985.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    24742
    Over 5 years in practice.
  • http://ww2.justanswer.com/uploads/JO/Josh2010/2012-4-29_19490_GettyImages80121770B.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    6561
    LL.B (Hons), Higher Prof. Dip. Law & Practice