Surveyors, standard T&Cs, RICS liability cap standard value?

[Mr Whippy]

Buying a house.

I've agreed to pay £650k and a surveyor quote was £785 to undertake level 2 which seems ok.

Reading their T&Cs:

[quote=T&Cs]Liability
RICS recommends the use of liability caps to RICS-regulated firms as a way in which to manage the risk in professional
work. Our aggregate liability arising out of, or in connection with, these services, whether arising from negligence, breach
of contract, or any other cause whatsoever, shall in no event exceed 10 time the agreed fee as stated above. This clause
shall not exclude or limit our liability for actual fraud and shall not limit our liability for death or personal injury caused by
our negligence.
[/quote]


This ultimately means the surveyor could have been out drinking the night before, turn up on the day and balls it up, and then when I go to claim costs for a falling down house I'm limited to £7,850 worth of recompense.

A quick google has thrown up limits like 1% of sale price which seems equally poor for negligent behaviour.

Another £20,000 fixed, which is getting better, but still seems quite limited given the initial price of the product.


I assumed these surveys were expensive largely because PI insurance makes them costly, but then it seems not.



I assume we have loads of people on here who are buying surveys and agreeing to these terms.

Does this look like a really crap surveyor taking the pee, or is this quite standard?


Any advice much appreciated.

Edited by Mr Whippy on Tuesday 21st January 11:02

[Lotobear]

....you could always look for a more expensive survey or ask the surveyor what he would charge for unlimited liability?

[TA14]

Mr Whippy said:

[quote=T&Cs] Liability
RICS recommends the use of liability caps to RICS-regulated firms as a way in which to manage the risk in professional
work. Our aggregate liability arising out of, or in connection with, these services, whether arising from negligence, breach
of contract, or any other cause whatsoever, shall in no event exceed 10 time the agreed fee as stated above. This clause
shall not exclude or limit our liability for actual fraud and shall not limit our liability for death or personal injury caused by
our negligence.

RICS actually says: "Members should not attempt to limit liability by reference to a multiple of the fees for a residential survey or valuation, particularly where the fee for the job is modest. Such clauses are likely to fail the test for reasonableness and fairness, particularly in a consumer context. Limits by reference to the value of the property, or agreeing a reasonable share of responsibility for the cost of repairs in any survey claim, are more likely to be regarded as fair and reasonable, but again this will depend on the level agreed."
B3 Edited because Mr W got the link to work

Edited by TA14 on Tuesday 21st January 20:01

[Mr Whippy]

I wasn’t sure who to use so the EA sent me these.

I’m guessing there is a referral cost in here too.


Thanks for looking through the full RICS guidance TA14, I thought I had read it all but clearly not.
I’ll have another proper look through and then poke my agent and ask what their referral fee is.

It feels like I could probably get a better survey elsewhere at this price.

[Mr Whippy]

For anyone interested in full RICS guidance.

It’s very odd surveyors do this when it could be argued it’s unreasonable if a claim arises.

They’re paying for PII and if they’re doing a good job, then why do what is being advised against, while broadly copying the exact word for word RICS guidance elsewhere.

https://www.rics.org/content/dam/ricsglobal/docume...

[Chrisgr31]

Is £785 a lot? It presumably includes VAT, so the actual fee is £655. For that price a qualified valuer has to visit the property, do the inspection, write up the report etc. They also have to have the necessary PI cover too

[Fatboy]

Chrisgr31 said:

Is £785 a lot? It presumably includes VAT, so the actual fee is £655. For that price a qualified valuer has to visit the property, do the inspection, write up the report etc. They also have to have the necessary PI cover too

It is a lot when they're trying to weasel out of any real liability for their work...

[Mr Whippy]

No idea.

I’ll have to ring around tomorrow and see what everyone else does.

If this is standard practice then it seems it’s just the way it is.

But it seems a bit silly for this industry to look one way (RICS all professional regulated etc), advise that way (guidance document, rules etc), but act in another (not follow the rules)… and essentially at these levels of insured sums (£8,000 in my case) are basically offering their experienced opinion, rather than professional advice with indemnity that’d cover anything worthwhile in the event of negligence.


£8,000 I can pull out of savings.

£60,000 for a major issue I’d be struggling, and looking to indemnity insurance because I’d paid these professionals… oh.

It even says in their rules their liability limits should be set out in their opening documentation/comms, not hidden in small print… like mine is.


Just seems really scummy and stty.


But as said, maybe it’s just the way it is.

Edited by Mr Whippy on Tuesday 21st January 21:11

[Terminator X]

10 times fee seems ok to me. Why would you take £100's of thousands of liability when effectively being paid peanuts.

TX.

[Mr Whippy]

My house insurance do?

And my own PI insurer do.

And my car insurer does if I crash into a Veyron.


One then assumes that mistakes must happen often to justify this position.


But then if they do, the insurance element is largely a bogus feature… and what you’d prefer is someone good at not making mistakes.
So just as my insurer will cover me for peanuts if I don’t make mistakes, are surveyors setting this limit very low actually mistake prone?

Edited by Mr Whippy on Tuesday 21st January 21:31

[Terminator X]

When was the last time you made a claim for your house falling down. Hence the low premium.

Also they have a team of lawyers looking to void claims.

Also excess for insurance claims as they know that 99/100 claims are small value so they never have to pay out.

TX.

[Mr Whippy]

But that argument just applies similarly for a surveyor's survey doesn't it?

Ie, are they always a total loss claim because of survey negligence?



I'm happy to pay on the basis that I'm getting a competent person to do lots of looking on my behalf.

But the whole 'Royal Institute' and guidelines/rules/protections seem a bit over-blown and over-sold to me because the industry seems to be broadly ignoring it's own guidance on this element, which seems a bit odd.


And on that basis, since all surveyors are RICS (which as we see is then meaningless as a differentiator), and the indemnity allows them to evade negligence irrespective of their RICS status... then finding a genuinely good surveyor and pushing that responsibility onto the consumer is then the primary goal.




Simply put, RICS doesn't guarnatee consumers get a good surveyor and the backup should something go wrong.

But the consumer can choose a good surveyor, RICS just provides a minimum standard but doesn't guarantee any real insurance cover for their work.