Valuer’s negligence – 14.5% within the margin of error

To be negligent, a valuer’s valuation must fall outside the range permitted to a non-negligent valuer for that kind of valuation and the valuer must have acted negligently by not acting in accordance with professionally accepted practices. The High Court has dismissed a claim for damages in Bratt v Jones [2024] EWHC 631 (Ch). Freehold development land at Bodicote, Banbury, Oxfordshire, was subject to an option agreement of May 2002 between Bratt and Banner Homes. Banner exercised its option to purchase the site at 90% of its market value in June 2013, the agreed valuation date. Jones was appointed to determine the market value of the site. Jones produced valuations by reference to comparables and a residual appraisal and valued the site at £4.07m. Banner acquired the land and constructed 86 dwellings on it, 32 of which were affordable housing. Bratt claimed the land was worth between £7m and £8.6m, a margin of 10% above and below £7.8m. He claimed in damages the difference between 90% of the site’s true value and 90% of £4.07m, less agreed costs. It is a precondition for liability in negligent valuation claims that the valuation must fall outside the range permitted to a non-negligent valuer (Merivale Moore plc v Strutt & Parker [1999] 2 EGLR 171). The court must decide the correct value and the appropriate margin of error to determine the bracket within which a non-negligent valuation would have fallen. This depends on the facts of the case and guidance provided by K/S Lincoln v CB Richard Ellis [2010] EWHC 1156 (TCC); [2010] PLSCS 156 (plus or minus 5% for a standard residential property, 10% for a one-off property or 15% if the property has exceptional features). If the valuation is outside the bracket, the court must consider whether the valuer has acted in accordance with professionally accepted practices (Bolam v Friern Hospital Management Committee [1957] 1 WLR 582). RICS guidance recognises the use of comparables in valuing development property. The court concluded that a proper residual valuation figure was £4.55m and the best evidence before the court as to the comparable value of the site was Jones’s own valuation. After adjustments, the valuation was £4,746,860 which was broadly consistent with the court’s residual valuation. A higher margin of error of 10-15% was appropriate due to the variety of issues which had arisen concerning the correct approach to valuation of the site. Jones’ original valuation was within 14.15% of the correct valuation and so within the margin of error allowable in respect of a non-negligent valuation. Bratt’s claim was dismissed. Louise Clark is a property law consultant and mediator