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Flawed Single Survey Would Cause Headache for Property Managers |
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16th March 2006 |
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Many of the flaws inherent in the single survey system of buying and selling houses which the Scottish Executive has scheduled to be introduced early in 2008, despite a disastrous pilot study, have been well documented, but one flaw which is less well known is the headache it will give property managers.
That’s because it is more than likely that, in practice, there will be numerous instances where a surveyor commissioned by a property seller to produce a single survey will be required to contact the property manager for various details about the condition of the overall building, particularly those aspects of the building, such as the stairwell and the roof, which are under common ownership.
For any number of reasons, the property manager might well be reluctant to divulge such information to the surveyor. There might, for example, be issues about the condition of the property that require investigation, such as whether or not the roof is in need of repair, or whether the common stairwell might require a damp proof course treatment.
Or a property manager’s reluctance to assist a surveyor might stem from the not-uncommon fact that, at any point in time, there might be a sum of money outstanding so that a manager will choose to delay processing any request for information until such time as the surveyor’s client settles an outstanding bill.
And in addition to a reluctance to divulge information, it is possible that property managers might be prevented from furnishing surveyors with certain information about the condition of the property by the Data Protection Act which could require that the manager must obtain written permission to share information from all the other property owners with an interest in the common aspects of the property.
But even with a property managers’ agreement to divulge information, it is by no means certain that a single survey will provide the extent of detail about a property’s structural condition that the Executive seems to think. Rather, the single survey is likely to be broadly equivalent to the existing Scheme II type survey and it will not, for example, go into any detail about the condition of a property’s underfloor areas.
Of course, should a single survey indeed highlight a series of repairs necessary to a property, then it is unlikely to be welcomed by those sellers required to stump up the £500-£700 for the privilege of being told that their property is in a poor state of repair and requires a substantial sum of money to carry out the work required. Such a report would, of course, make their property much harder to sell and, thereby, lessen the prospect of the seller successfully recouping the cost of the survey in the first place.
These are only some of the issues associated with the single survey system that have yet to be resolved satisfactorily. How well will the single survey work, for example, when house prices are falling rather than rising? After all, the single survey is designed to work on the principle that a seller will commission and pay for it, it will then be distributed to interested buyers and then the seller will only recoup the cost of the single survey once it is sold, at which point the survey is paid for by the successful buyer.
That means, therefore, that, should the property remain unsold, then the seller remains out of pocket. In a stagnant housing market, the period a seller could remain out of pocket could easily run to months. And with a single survey likely to cost somewhere around £500-£700 for the average property, that represents a substantial sum to be out of pocket for such an extended period of time. Consequently, the single survey could exacerbate an already slow housing market by making prospective sellers less willing to stump up the funds necessary to commission a survey when there is a realistic prospect that they are unlikely to recoup their funds for some months hence.
But the biggest flaw of the single survey system is the fact that it seeks to act in the best interests of both the buyer and seller. That is just not possible because sellers want to get as much for the property as they can while buyers want to secure it as cheaply as they can so that if a single survey report satisfies one of the parties, it will almost certainly disadvantage the other.
As such, the headaches produced by the introduction of a single survey for buying and selling houses would not be confined to property managers and surveyors - but would likely be shared amongst all professionals involved in the process, including conveyancing lawyers and estate agents. Indeed, the only people convinced of the merits of the proposed system would appear to be Scottish Executive ministers.
Jack Fulton is a Director at Ross + Liddell property managers www.ross-liddell.com
ENDS
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