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Post by masquedefer on Jun 23, 2016 20:21:55 GMT
Hello
I am sorry for not posting as often as I should to this forum. I currently have in excess of £100k with SS and consequently applaud all the DD that goes on here which I follow avidly without sadly making as many contributions as all other mailers who are "on the ball" and achieve wonderful "crowd DD" for us all.
I am a chartered surveyor and see some other angles of risk which may not be covered by other threads.
In particular we all rely on the independent valuations commissioned by SS in the knowledge that if there is any fraud or an inaccurate valuation then we can hopefully sue the surveyor.
Here is an email that I know someone has sent (not me of course) to a firm of surveyors who currently appear to be doing a lot of work for SS (AKA - AZ**C Pr*p**ty V**l**rs Ltd). I hope the email is self-explanatory. Perhaps SS should not become too complacent and instead should spread the liability across as many surveying firms as possible? As sure as eggs are eggs we will need this claim route one day, IMHO!
BTW, In the email below, I have represented myself as acting on behalf of investors with £5 million tucked into SS -which I suppose is another question - How much cash investment is represented by this forum? (Perhaps the forum needs a poll to assess this?)
Hi XXXXX
I am a relatively large direct personal investor with Lendy/Saving Stream (SS) and I am carrying out due diligence on behalf of a large “P2P” investing crowd who currently invest in excess of £5 million with SS.
I note that your company (xxxxxxxx) are currently carrying out a significantly increased number of commissions for SS.
Please can you provide me with suitable reassurance of the level of your PI cover and that it is valid for the foreseeable risk of multiple claims against your business from SS.
Also can you provide reassurance that your nationwide team of surveyors are directly employed by you (or if acting as sub-consultants) have their own equivalent level of PI cover to provide the equivalent cover, given the increased level of single client business (via SS).
Regards
YYYY
Also on another point does anyone systematically check via the Land Registry that SS/Lendy actually have a legal charge for the specified loan amount on each of investment? It only costs £3 per search (once an account is set up). {removed by mod} surely Crowd DD should extend to this level too?
Any thoughts?
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jun 23, 2016 20:28:34 GMT
Hello ......Also on another point does anyone systematically check via the Land Registry that SS/Lendy actually have a legal charge for the specified loan amount on each of investment? It only costs £3 per search (once an account is set up). {removed by mod} surely Crowd DD should extend to this level too? Any thoughts? I'm not sure I understand the first part of your post; are you awaiting a response of some sort, or do you want somebody to send the email on the investors behalves? However, I can reassure you on the second part of your post; all charges are found on companies house against the companies that own the security. Although I haven't checked every borrower, I have on all the loans I have invested in, and they all have a charge.
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ben
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Post by ben on Jun 23, 2016 20:31:20 GMT
I be suprised if they give you a meanful answer.
As for the hopefully sueing in case of default you say your a chartered surveyor surely you must know that would be pretty much impossible. The only real chance of a succesful case would be if it could be proved that they delibeltly lied for whatever reason or they were not actually qualified to complete the work. A valuation is at best guess work based on relevent factors at the time all of them could change between the time of valuation and the actual default.
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ben
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Post by ben on Jun 23, 2016 20:34:10 GMT
Hello ......Also on another point does anyone systematically check via the Land Registry that SS/Lendy actually have a legal charge for the specified loan amount on each of investment? It only costs £3 per search (once an account is set up). {removed by mod} surely Crowd DD should extend to this level too? Any thoughts? I'm not sure I understand the first part of your post; are you awaiting a response of some sort, or do you want somebody to send the email on the investors behalves? However, I can reassure you on the second part of your post; all charges are found on companies house against the companies that own the security. Although I haven't checked every borrower, I have on all the loans have invested in, and they all have a charge. I agree to on the charges. I cant believe that someone that has invested over £100,000 into SS has not bothered to check the loans they invest in.
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Post by harvey on Jun 24, 2016 10:56:48 GMT
I'm surprised the OP here claims to be a chartered surveyor,I'm very sceptical about that for several reasons...
but his post must be almoost against the surveyors' code of conduct
Plus the courts have ruled over and over again that valuation is not an exact science and in a few cases I have seen the judges have ruled a valuation tolerance of 15% either way is quite within the realms of acceptability and competence and given that many valuations are based on assumptions provided to the valuer that may not be real, and of course that values change from month to month,it is very very difficult indeed to ever sue a professional valuer successfully , you would need to be able to prove that he had made a fundamental mistake, like for example valuing the wrong building.
In my opinion nobody should place any reliance on being able to recover shortfalls from valuers, it's not going to happen.
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james
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Post by james on Jun 25, 2016 16:03:45 GMT
As well as the PI cover there are a few potential issues:*
1. valuations that contain wording saying not for investment purposes when the valuers know or clearly should have known that they were going to be relied on by investors (ubiquitous).
2. valuations based on hypotheticals like planning permission that has not been granted that do not make it absolutely clear that the valuation is not based on the facts at the time of valuation, thereby potentially contributing to misleading investors about the value of security and loan to value and hence investment risk (the PBL20 case, where wording "with all the applicable planning consents attached" was used with no explicit statement that the consents had not been granted or the amount of the valuation flowing from those consents made anywhere by them or the platform).
3. valuations where value is in significant part established by asking the borrower what they think something is worth (the funeral plots case).
4. a valuation firm where a substantial part of its ongoing business is with a single customer for use by their customers which might cause pressure not to be scrupulously neutral in an area where opinion does have a valid bearing on valuations.
A potential protective measure for most of these might be having valuations commissioned by a body that represents lenders or otherwise has direct fiduciary responsibility to lenders rather than platform. For example, a trustee controlled protection fund might do it, assuming that the trustees were not simply senior management at the platform who would naturally share the same risk potential as the platform doing it. I assume that with investors at times having five million Pounds and more at the platform it would be possible to obtain at least some interest from such lenders in participating to some degree.
*Please let me know if you believe that any of the things I mention here as examples aren't 100% correct! To the best of my current knowledge they all are. For example, the direct quote is from AML and HA LLP's valuation report provided to prospective lenders.
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Post by masquedefer on Jun 26, 2016 12:45:12 GMT
@ Cooling_Dude
1) I'm not sure I understand the first part of your post; are you awaiting a response of some sort, or do you want somebody to send the email on the investors behalves?
Letter was sent to the surveyor - no reply yet. 2)However, I can reassure you on the second part of your post; all charges are found on companies house against the companies that own the security. Although I haven't checked every borrower, I have on all the loans I have invested in, and they all have a charge.
Agreed -but Companies House register of charges is only for companies (i.e. it does not cover loans to non-corporate bodies, AKA individuals, Trusts, Charities, etc., etc.). However all land legal charges are registered at the Land Registry (LR). But I digress, I was only suggesting that forum members might take turns to check that a loan charge is registered @ the LR (i.e. avoid us all each paying the search fee at the LR). @ Others who think Valuation Surveyors don't get sued
Sorry but you are wrong - They do, often and big time. Frequently the PI insurers just pay up without going to court. The potential protection of SS being able to sue a surveyor in a prima facie case of negligence should not be neglected or undervalued (geddit!) jamesAll excellent points. I suppose my original concern lies within your point 4. @ Forum I hope SS (and the forum) appreciate the various points made by James and his recommendations. BTW, I assure the forum that I am not touting for business. I am about to retire and anyway don't do commercial val work (it's too risky for me!!). My main concern is that I don't want SS to be giving a large part of their val business to a small number of surveying firms (too cosy a relationship for my liking!). |
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Post by easilyparted on Aug 19, 2016 11:19:44 GMT
Only just found this thread but I think you guys should be listening very intently to masquedefer he raises some very interesting points and his worries are well founded. |
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Post by harryvederci on Aug 19, 2016 12:46:26 GMT
Indeed, look for the RICS Regulated firm confirmation on the valuation report
If it isnt RICS Regulated you have a problem if SS need to call on it
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Post by dualinvestor on Aug 19, 2016 14:14:21 GMT
I find the "draft email" contained in the OP very odd. DD for a "crowd" doesn't sound professional, a group maybe, and it's content is a tad wierd certainly being contained in an email. In my professional experience "DD*" is conducted from the inside, this "crowd" make up nearly 5% of the total on the platform and if organised would be a position to get them to "sponsor it."
Minimum standards of Professional Indemnity Insurance is usually set by the professional body, it is also required in the RICS "red book" to be a matter disclosed in each valutaion. As SS only deals with these types of valuers the whole thing would seem redundant.
* Referring to traditional "systems" Due Dilligence not the scrutinisation of individual loans provided by posters on boards such as this.
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