Margin Of Error In Valuation Of Property
Book Small Business Hub Consumer guides Your specialism BCIS Home Knowledge Margins of error Back to Knowledge Property glossary and guides Alternative dispute resolutionAsbestos in the construction industryBlack BookBuilding contracts in the UKBuilding costs around the worldBuilding RegulationsBuilding surveyingChancel liability repairs: what they can mean for property ownersCommercial estate agencyCommercial property managementCommercial rent reviewsCommercial service chargesCompulsory purchaseDefective Premises Act 1972DilapidationsFacilities managementFixtures and fittings (chattels)Flying freeholdsGreen DealGuide to buying a property in SpainHouse pricesInvestment riskMargins of errorParty wallsPrivate streets in the UK – what might your responsibilities be?Professional indemnity insurance (PII)Project managementProperty cyclesQuantity SurveyingRatingReal estate valuationResidential estate agency in the UKResidential property management in the UKThe role of an expert witnessTown and Village Greens in England and WalesTree roots and buildingsZoning Margins of error 06 Nov 2015 A look at what is deemed to be an acceptable margin of error in valuation disputes. It is has been left to the courts to decide what is a permitted margin of error when carrying out a valuation of property. Generally, case law precedent refers to a margin of between 10% and 15% depending upon the facts. Singer and Friedlander v John D Wood & Co [1977] 243 EG 212 states that the margin of error can be 10% either side of a figure that can be said to be the right figure that a competent careful and experienced valuer arrives at after making all the necessary enquiries and paying property regard to the state of the market. In exceptional circumstances, the permissible margin could be extended to about 15% or a little more either way. The permitted margin of error principle is considered in the following: Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1995] 12 EG 143 South Australian Asset Management Corporation v York Montague Ltd[1995] 3 WLR 87 First National Commercial Bank plc v Andrew S Taylor (Commercial) Ltd 1995 [1997] P.N.L.R. 37 Merivale Moore Plc v Strutt & Parker 1999 Goldstein v Levy Gee 2003 Scullion v Bank of Scotland Plc (t/a Colleys) 2010 K/S Lincoln v CB Richard Ellis Hotels Ltd 2010 Paratus AMC Ltd and Countrywide Surveyors 2011 Capital Alternative Fund Services (Guernsey) v Drivers Jonas QBD 2011 Blemain Finance Ltd v ESurv Ltd 2012 Webb Resolutio
Search twitter Login Toggle navigation Events Popular articles About Login Register Newsfeed Navigator Analytics Track Discover Newsfeed Navigator Analytics Track Discover Events Popular articles About Login Register Back Forward View original Forward Print Read Later ShareFacebookTwitterGoogle PlusLinked In Follow Please login to follow content. Register now for your free, tailored, daily legal newsfeed service. Questions? Please contact customerservices@lexology.com Register Valuers' PI: valuations and permissible margin of error CMS Cameron McKenna United Kingdom November 19 2015 The Court of Appeal has overturned the High Court’s decision inTitan v Colliersand found that Colliers’ valuation of a substantial commercial property was not negligent. Background http://www.rics.org/uk/knowledge/glossary/margins-of-error/ Colliers were instructed by Credit Suisse to produce a valuation of a large commercial property inNürnberg, occupied by Quelle, the then biggest mail-order company in Germany. The valuation was issued in December 2005 and valued the property at €135 million. Relying on the valuation and with security over the property, Credit Suisse advanced a loan of €110 million. The loan was sold to Titan as part of a process http://www.lexology.com/library/detail.aspx?g=4cde6dd4-c3c1-4087-81d2-65cba6575216 of securitisation. Titan subsequently issued commercial mortgage backed securities and the subscription by investors, or “noteholders”, in the securities funded the acquisition of the loan by Titan. The noteholders became the ultimate beneficiaries of the loan and the securities supporting the loans. The borrower defaulted and Titan brought proceedings against Colliers, arguing that the value of the property was €76.6 million. At first instance, Blair J held: The correct valuation of the property was €103 million and the permissible margin of error in this case would have been 15%. Colliers’ valuation had been outside the permissible “bracket” and was therefore negligent; Rejecting Colliers' argument that Titan had suffered no loss and that the noteholders were the correct party to sue, Titan had been entitled to bring the claim. Court of Appeal’s decision Negligence and permissible margin of error The legal principles in relation to a valuer’s negligence were not in dispute and, on appeal, Colliers did not challenge Blair J’s finding that the permissible margin of error in this case was 15% or the basic findings of fact on which he had based the valuation figure of €103 million. Instead Colliers challenged the judge’s inferential conclusions as to the “correct” value of the property. In finding that Colliers&rs
MANAGEMENT CORPORATE GOVERNANCE HR CONSULTING & EMPLOYMENT RISK MANAGEMENT CONTRACT MANAGEMENT IP LEGAL AUDIT & RISK MANAGEMENT Home Our Team Our 4 Departments Our Specialist Sectors Consulting Why Choose Us Our Service Our Clients & Testimonials We http://leman.ie/property-valuers-what-amounts-to-a-negligent-valuation/ Give Back Our Global Network – Primerus Our News & Insights Client Access Careers Contact Us Why Choose Us Our Service Our Clients & Testimonials We Give Back Our Global Network – Primerus Our News & Insights Client Access Careers Contact Us Thought Leadership Articles Property Valuers’ – what amounts to a negligent valuation? by Maria Edgeworth | Jan 25th 2016 In November of last year margin of the Court of Appeal in the UK delivered judgment in Titan Europe 2006-3 Plc v Colliers International UK Plc (In Liquidation). The proceedings related to a negligence action against Colliers International (UK) Plc (now in liquidation) (“Colliers”) for its overvaluing of a property in 2005. Background The background to the case involved Colliers preparing a valuation of a commercial property in Germany in December 2005. At the margin of error time Colliers valued the property at €135 million. On foot of that valuation a loan of €110 million was advanced by Credit Suisse to the owner of the property. Subsequently, the loan provided to the German property owner, together with multiple other loans provided by Credit Suisse against other European properties, was securitised and were transferred to Titan Europe 2006 Plc, a Special Purpose Vehicle (“SPV”). In the meantime, the property valued by Colliers was leased to a tenant. The tenant became insolvent and vacated the property. Consequently, without rent coming in, the owner of the property defaulted on the loan and became insolvent. The property was subsequently sold for €22.5 million. Titan issued proceedings against Colliers for negligence on the grounds that it had overvalued the property by almost €60 million. In considering the facts, the Commercial Court determined that the correct value of the property in 2005 was €103 million. Colliers valuation was over 15% above the Court’s ‘correct’ calculation and they were held to be negligent. The Court awarded €32 million in damages, representing the difference between Colliers’ valuation and the Court’s estimation. Colliers appealed the Commercial Court decision to the UK Court of Ap
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