There can be confusion over the difference between a survey and a valuation (discussed below). And between the different types and purposes of surveys. Strictly speaking the word ‘survey’ means no more than a look at a property by a professional person for a specific purpose – which could be to appraise its basic value as security for mortgage purposes or to assess the dilapidation’s schedule at the expiry of a full repairing lease.
These days the prospective buyers are usually sent a copy of the valuation report but one should not place too much faith in this superficial type of survey. It may have been subject to a thorough inspection by a qualified surveyor who would have commented on any real problems but that is not necessarily the case.
This type of report has a single purpose: to confirm to the lender that it would not be ill-advised if they were to advance the requested loan secured by a charge against the title to the property. If there is a major defect – which, unrepaired, would significantly reduce the resale value – the surveyor should have drawn this to the attention of the lender as their client.
Of course, where a particular defect is
significant, the valuer may recommend a reduced offer, suggest a retention from
the advance, or even turn the property down completely. Remember that the report
was commissioned by the lender and accordingly it is not a warranty or guarantee.
Mostly importantly you should not rely on it fully as indicating that nothing
else is remiss with the property in question.
A full Structural Survey is a more involved and detailed investigation which will have been carried out by a qualified surveyor who will then report in detail on the condition of most aspects of the property – any matters not covered, for example, the drains, the heating system or whatever, will have been noted in the report usually with recommendations for contacting a specialist contractor. In the case of a big old house or converted flats it may be imperative to have such a detailed survey carried out, but it will be a relatively costly undertaking.
You must also bear in mind that the surveyor will have tried to make reference to every existing fault – and any potential fault – which has come to his attention. Consequently, his report may well sound quite a catalogue overall, so it is particularly important that you understand the implications of what is said. We do recommend that you read the report carefully, and maybe talk to your solicitor, to avoid jumping to hasty conclusions.
If a survey does show up a major and unexpected fault, then we may be able to arrange for an adjustment in the price, or for the seller to assist with the cost of the remedial work. Either way it is not the end of the world – there are very few properties which could pass a full structural survey unscathed and clean.
Incidentally, the Royal Institution of Chartered Surveyors and the Construction Industry Council argue that the term ‘structural survey’ can be misleading and have tried to define various building inspections and surveys very precisely. They have found that the same titles sometimes identify different services on a localised basis and can confuse people moving from one part of the country to another.
Some ‘structural surveys’ would include a valuation, while others prepared by a structural engineer for example, may only cover the load-bearing elements and not expect to be involved in more superficial issues.
Accordingly, these Professional Bodies recommended that the term ‘structural survey’ is replaced with ‘building survey’ and stress that it is everybody’s interests to have the conditions of engagement, with a definition of the brief and the extent of the inspection to be undertake, agreed in writing at the outset.
A building survey is therefore a investigation and assessment of the construction and condition of a building which will not normally include advice on value. This may be carried out by a chartered surveyor or structural engineer and will generally include the structure, fabric, finishes and grounds. The exposure and testing of services are not usually covered.
The extent of the survey should be subject to specific agreement with the client while advice on the cost of repairs will be subject to such agreement. The report will include reference to visible defects and guidance on appropriate maintenance and remedial measures.
The report may still recommend that specialist and elemental investigations are undertaken or other specialist advice obtained relating to specific issues.
Because of the time, cost and professional responsibility involved in producing a structural or building survey, they are expensive. There is a more limited form of house buyer’s survey which is widely available. These ‘Home Buyer’s Reports’ are prepared on a standardised basis and intended as a mid-way option between a valuation and a full building survey. The pro-forma cost is related to the price of the property while the report includes a number of strong explanation and exclusion clauses. The latest version also includes recommendations for repair work graded according to their importance and urgency.
For straightforward properties where the client requires no out-of-the-ordinary advice, these reports in a standard format and under the relevant standard conditions of engagement are proving popular although minor items of disrepair which do not materially affect the value will not normally be reported. Whether services will be tested or not will be agreed between the parties beforehand.
Finally, the question arises of whether one should have a separate survey, or rely on the valuer’s report to the lending authority. Generally speaking, with a modern property there should be nothing major which is not apparent on close inspection. On the other hand if you are particularly concerned about an older property, or a worrying feature of a more modern property and really feel it is worth spending money to be fully informed and reassured about the condition, then we can give you a list of reputable local surveyors that you may care to approach. Obviously, we are not in a position to offer this service ourselves if you are buying one of the many properties we are offering for sale.
Do not confuse surveys, any surveys
– which are commissioned by an individual and for their own purposes –
with Home Condition Reports which will be introduced in a few years time. They
are not surveys but a ‘snapshot’ of the property at that point in
time and will be in the public domain and open to free inspection by potential