Rat and Mouse
Wed
25
May
Scullion vs Colleys

A test case, heard in the Court of Appeal earlier this week, might open the door to litigation brought by buy-to-let landlords who don’t feel they’ve been dealt the hand they were promised.

Scullion vs Colleys dates back to 2002, when Mr Scullion bought a buy-to-let flat, based on a valuation (of both capital value and rental income). The valuation turned out to be optimistic, and Scullion sought damages. Colleys (the Bank of Scotland’s valuation wing) denied it owed the usual duty of care because Mr Scullion wasn’t a residential buyer… he was an investor. Different rules applied.

The judge disagreed, pointing out that the apartment in question was at the bottom end of the market, the investor was an amateur and it was reasonable that he relied on the valuation. He was – in effect – in the same position as a first-time buyer. In 2010, he awarded damages of £72,234 amazingly even though the capital valuation turned out to be conservative, but based on an over-valuation of rental income.

Our publisher looks at an interesting Court of Appeal hearing, which may have implications for buy-to-let landlords who feel they might have been misled by promises high rental income, in his guest column for Citywire.

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