Yianni v Edwin Evans & Sons [1982] QB 438 concerned buyers of a modest house who applied for a building society mortgage. The society instructed the defendant surveyors to carry out a valuation. The buyers, like most purchasers of inexpensive homes, did not commission their own structural survey and relied on the fact that the mortgage had been approved. The valuation missed serious structural defects, and the buyers sued the valuers directly.
The court held that the valuers owed the buyers a duty of care. It was reasonably foreseeable that purchasers of low-value property would rely on the mortgage valuation rather than pay twice for overlapping inspections. The valuers knew, or ought to have known, that their report would in practice be relied on by the very people buying the house. This was an early and influential statement of the principle later confirmed by the House of Lords in Smith v Eric S Bush.
Yianni established the practical reality that underpins much residential valuation litigation: at the lower end of the market, the buyer and the lender rely on the same document. A firm cannot assume that its only exposure is to the client who instructed and paid it.
Yianni and Smith together frame the residential valuer's duty. Apex explains how this exposure is reflected in cover on its surveyors' PI guide, and the connected agency and management issues on the estate and letting agents' PI guide. The consistent theme is that the duty of care follows foreseeable reliance, and a policy should be arranged to answer the claim the law recognises.
The practical lesson of Yianni is that the scope and limitations of a valuation should be recorded clearly, because the dispute usually turns on what a reasonably competent valuer should have seen and reported within the agreed scope. A mortgage valuation is not a structural survey, and the difference between the two is often at the heart of a claim by a disappointed buyer who expected more than the instruction covered.
Clear terms of engagement, a documented inspection, and reporting that states the assumptions and limitations relied on all help to define the boundary of the duty. Where a buyer is told, and it is recorded, that the report is a limited valuation rather than a survey, the firm is in a stronger position if a latent defect later emerges. None of this removes the third-party duty that Yianni and Smith establish, but it shapes the scope of that duty and gives the firm and its insurer a defensible account of what was, and was not, undertaken.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.