Episode 32 – Part 1 – Understanding which survey level is appropriate and when with Tim Kenny

The following transcript is autogenerated so may contain errors.

 Matt Nally: On this week’s episode we have Tim Kenny from Tim Kenny Surveying, so thank you for coming on today. Thank you for having me on. Do you want to give everyone a bit of background? I think some people will have seen you on LinkedIn and you post on there quite regularly.

Some may already know you, but do you want to give a bit of background as to yeah, who you are, what you do?

Tim Kenny: Yeah. Okay. For those that do, I’m the person who just waffles garbage on LinkedIn on an overly regular basis, according to some people. But apart from doing that, I’m also a residential surveyor qualified back in 2007.

Didn’t take the most traditional route into saying I actually qualified as a home inspector first So for anybody who is old enough and has been hanging around the property industry long enough will remember home information packs Which apparently making some kind of comeback at some point, but yeah I don’t like to think about those because I had I don’t want to say traumatic experiences, but complicated experiences.

But I, so I trained as a home inspector. I was going to produce home condition reports that were going to go into the home information packs. And probably everyone already knows what happened with those and where they went. Good news is that kind of gave me a basic starting point. as a surveyor. And then, I’ve gone on from there to have a career, just getting out inspecting properties and reporting on them.

And then from there fell into training work as well. Back in 2020, so full on lockdown period Saba, the organization that actually trained me wanted some, wanted to give their students a little bit of a Some kind of taste of mentoring, students couldn’t get out with surveyors anymore because nobody was going near, near anybody.

So they want to bring in a little bit of a, some takes that. So they brought me in just to do presentations on some of the properties that I’ve been to and that then went from there into kind of, developed into the training offer now.

Matt Nally: That’s really interesting. Okay. So I want to think what we’re going to talk about today is obviously level threes and a number of different things across the three topics.

Understanding when a survey type is appropriate and. Requirements for them and so on. But what’s sparked your interest with level three specifically, and then, and staying in the training side since COVID.

Tim Kenny: So I I got interested in why I provide the training on level three surveys is.

Because no one else does it. See, there are, most of the training of this type that happens tends to happen in house, doesn’t it? Where you get, the company or the senior surveyors will train up their, the more junior members and give them their idea as to what a level three survey is or a level two or whatever it is.

And that, that’s great. And I’m all for kind of this, that mentoring approach to training, giving people the benefit. of your experience. But also it can be a little bit ad hoc. It’s a little bit, I reckon it’s done like this. So that’s how I think you should go ahead and do it.

And actually, there’s, maybe there’s a need for to step back from it and go actually, what really is a level three survey? And I know I particularly because I So I didn’t take my traditional route. I had to teach myself what a level three survey was. I had some support from other good surveyors and everything else.

But yeah, I had to work it out from first principles. I had to go back to the documents, go back to the case, or go back to as many copies of reports I could get my hands on. And that kind of led to this understanding of what actually a level three survey is, and I think as an industry.

We’re quite good at focusing on the building pathology, the construction knowledge, that solid technical knowledge. There are some really great surveyors out there with really great knowledge that they share and those that are just out working. We can always do better. I’m not going to say we’re perfect and mistakes are happening on a regular basis, but I think, as an industry, we do that side of it well.

But they say no one’s focusing on actually The the what actually makes level three, if you have all of that, you can have the best construction, the best building pathology knowledge. You can go out and you can, mentally pull a building apart, but if you can’t put that into a compliant and useful report, that not worthless, so yeah, there’s that that missing step and that’s what I try and fill with the training that, that I offer.

Matt Nally: Okay. So it’s an interesting starting point then. And we touched on this just before we actually started recording, but. How do you decide what level of survey is appropriate for, I’m going to say a job, because is it based on the property or is it based on the sort of client’s requirements?

So can one trump the other? Yeah. Here we do

Tim Kenny: have the RICS home survey standards and we’re going to talk, we’re going to have to talk about the home survey standards quite a lot in this. And I really want to just, Sort of start by saying I think it’s a good document, this is it’s a massive improvement on what we had before I think it is it’s really well structured the concept of it is really good But I tend to view it as a good first draft we’re still at that relatively early stage with this format of standard.

We’re due a new one, hopefully the work on that starting soon and we’ll see a new one next year. So that’d be really good. But I say, because like with any first draft, it has its flaws and it hasn’t been until it’s really been in use, it’s only been in use since 2021. So it’s three years now that you start to see where the problems in it are.

So I’m just saying that I do think it’s a good document, so I’m not going to flag it off and I’m not going to be overly critical about it, but we do have to reflect somewhat on the elements that are missing, the kind of the problems that are there and we need to work out.

Matt Nally: I think it’s looking at it from a continual improvement perspective though, isn’t it?

It’s not, we’re not saying you have a perfect anything and that’s where it goes. It’s just, yeah, we’re now on the continual improvement path.

Tim Kenny: How do you refine it? And as times change, as new things come in, new things will go into that document as well, even in the future. But anyway, one of the things it does do really well is, it’s, when you look at the kind of the requirement where it suggests what type of property should have a server, have what level of server, the descriptions of the levels, the first thing it talks about under each of those levels is the client.

It, for level one, it says this this survey level is designed for clients who want a cost effective report, this this is this what level two is this is for clients who want, first thing it talks about is the want of the client, what they need, what they think they need.

So ultimately, yes, it is the client who determines what level of survey, what their needs determine the level. So not the property. I think to me, too many surveyors have this strict idea of, okay if it’s this age, it has to have a level three,

Matt Nally: nothing and vice versa, the other way sometimes as well.

It’s this age, you

Tim Kenny: only needs a level two. Yeah. Yeah. Yeah. There is nothing in the standards, nothing in the case law dictating that you cannot do a level, level one on a 500 year old house. Literally the stands are open. If your knowledge, your client is suitably advised of the risks.

Then that’s all you need to do. Obviously, we have to talk about heart and large if we’re going to talk about survey levels. That’s the kind of the, we don’t get many cases as residential surveyors that relate to condition. The valuers, there’s plenty out there for valuers.

I’m not a valuer, so I don’t get to have to read all of those ones. But this is the case that needs to really stands out for us as condition based surveyors. Because a lot of that does revolve around survey levels, doesn’t it? There’s even an argument from one of the kind of the experts who was involved in the case that, if the surveyor had done a level 3, he’d have probably gone away with it.

Now, obviously, I accept his opinion. He was involved in the case, but my reading of it doesn’t quite fit with that

Matt Nally: for anyone that’s not. I think most people should have heard about how it first starts, but is it worth giving you just a quick bit of background on that? Yeah.

Tim Kenny: I went out, obviously took an inquiry for a survey looked at what we all do, like a right move or whatever else you want to look at to get some details.

So our property that was relatively modern, I believe it had extensive. Renovation, I think it was, I think it was interpreted as being rebuilt not so much renovated. So I went out, did their survey, carried out their inspection where they had some concerns over the quality of some of the work.

And I mentioned that because I think it’s a really important point that we’ll probably come back to. They were concerned about the quality of the finish and that kind of gave rise to a concern, but they didn’t see many specific defects. Thank you. They moved in, found the property was damp. It turns out it hadn’t been rebuilt.

This had been renovated and extended. And one of the things that got missed out was a damp proof course. So obviously we can have a longer conversation about rising damp and the purpose of damp proof courses. But in this instance, there was no DPC and the property was suffering from significant damp issues.

Obviously surveyor hadn’t reported these. So that’s immediately comes to a claim goes through the process. Surveyor is obviously stands is the one up in court. I think they did, they took action against the solicitor and the architects involved in the project as well. But unfortunately for the surveyor, the architect and solicitors both settled out of court.

So their responsibility was not considered as part of the case. So everything fell on the surveyor. It’s a big case because. Firstly, the numbers involved were quite large. The judge accepted the opinions of one of the experts that the only way to resolve the issue was to literally fit a new physical DPC.

Which obviously is not a, or in fact actually knock down and rebuild with a new DPC. So you get a damages figure which I think is in the two or three hundred thousand range. There’s also very considerable costs which gets you to the sort of six hundred thousand. It’s also significant because the kind of the judge was considering different, a different approach to damages as opposed to thinking about the reduction in value.

They were thinking about the cost of the works and some other technicalities in that. But one of the, one of the key findings in there was that if the surveyor had carried out a level three survey, so they booked it as a level two because they saw the property as, as relatively modern. So level two is what we would generally book for it.

But they found actually that if the surveyor had got there and carried out a level three, they would have identified the defects that were present. Now again, we can question some of the expert opinion that says that any level of survey would have found those defects. But that’s expert opinion not legal judgment.

Yes, they found that if he’d done a level three, that would have, Fact that the issues and he’d have provided safety for his clients. There was also some discussion around a professional consultant’s certificate And the kind of documentation that backs up extensions. So anyway, so there’s all of these complex issues involved in it but I think what is most relevant for kind of this aspect of the discussion is that the judge found that Yes, the surveyor had booked a level two and that was reasonable to do based on what?

You they could see before they visited the property. But actually, what the surveyor should have done is when they in fact got there and found there were differences between what they believed to be present and what was present they should have updated their advice to the client. So they, so the surveyor should have gone, okay, look, I’m here.

This isn’t what I thought it was. There are potentially some more significant issues. Therefore my client would be better served by having a level three survey So they should have picked up the phone or done an email or whatever you would want to do Contact the client and say hang on this isn’t right.

I think you’re going to need a level three sort further advice from the client before carrying on and I think it’s really good because it does set a clear Pattern now for what we should be doing with surveys I think you know, it’s perhaps something that should have always been there, but we now need to think about this so The way I look at it, we have the home survey standards that say it’s the client’s need or opinions or desires that dictate the level of survey, they’d make the decision, but we as a surveyor offer them advice as to what might suit them best.

Now, the home survey standards include some basis for that advice, age of the property, Condition complexity, all of these things come into it. So we can look at that and go, yep, I think based on this, what I can see, this is the level of survey you should have. If you. For example, say I think I’ve seen it.

I think you should have a level three survey because it is complex or it’s old or it’s in a very poor condition. But if you choose not to do that, if you choose a level three, yes, you will save money, but you will take on this additional risk. So I may not report to you some of the things that might get flagged up on a level two, again, that’s a little bit iffy because I can very much make a strong case that everything that you’d find on a level two, you’d find on a level three, but pretty much Ignoring that you’re saying to them.

Okay. Yep. I think you should do a level three But actually if you choose a level two, you will save money, but you will take on some risk that’s how it should work. And if they go, yeah, okay I want you to go ahead and do a level three. That’s fine If they want you to go ahead and do a level two, that’s fine.

I’m not saying you have to I’ve quite often made the point that, the point before, that the standards and regulation don’t dictate what level of survey we can do. We can do a level 1 on a 200 year old house, we can do a level 1 on a 500 year old house if we really wanted to. And sometimes I get, I’ve got a little bit of flack from surveyors on that, but again, it’s good to make the point that I’m just saying that’s what the regulation and the statute said the regulators, sorry.

And the case law saying, doesn’t mean you have to do it. You’re not obliged to take any survey. We’re not barristers. We don’t have a cab rank rule for surveyors. If you don’t want to take the work, don’t take the work. No one’s making you. I’m just saying that if you choose to. You are well within your rights to do that.

Matt Nally: If a property really isn’t in the surveyors opinion, better suited to a level three, and you provided that advice I suppose you’ve covered yourself on that respect. Is there a risk? And I know this, I know you’re not a lawyer, so this is not legal advice, of course, but just to caveat that before I ask, but is there still a risk that if you go ahead with a level two or a level one, for example that you’re going to be emitting emitting some information potentially although you’ve advised that as a risk that it’s outside of what a professional would do and that you therefore at risk or did the, do the standards cover you for?

I

Tim Kenny: can’t see how you would be as long as you’ve been clear in your advice to your clients. That’s all that matters. I always the kind of example I give on this is one actually not from residential surveying, but actually from my days working in, in, in block management. So on my first jobs was managing blocks of flats and freehold estates and dealing with all of those things.

And. Anybody who’s done any property management work will know it’s quite a tough world. But in that, you’re, as the property manager, you’re the agent working on behalf of a freeholder or usually a resident management company. And the way I would always explain my role to a resident management company was to say, Okay look, obviously I’ll set a service charge budget for you.

I’ll tell you what I think it’s going to cost to run this property. And part of that will include a reserve fund provision. So roof will need replacing and the windows need doing or whatever. Okay. I’ll put some money aside for that. If one year you come along to me and say, actually, you know what? We’ve got 30, 000 pounds sat in our reserve fund.

I want you to go and go away and build us a swimming pool with that money. We don’t want to spend it on the roof anymore. We don’t want to spend it on the vehicle gates. We want to build a swimming pool because we’d love a swimming pool. My job as a managing agent would be saying to them, okay, I think that’s a bad idea because if you do that, you’re not going to have money for your, for all the things that we plan to do it.

On top of that, it will be, it’s not compliant with the terms of the lease, which don’t permit the management company to spend money on improvements. So it’s really a flawed idea. And I would do that. And I put that in writing to them and I would definitely put it in writing. If they then wrote back to me and said, we want you to go ahead and build a swimming pool.

I’d say fine. I, it’s not, I don’t care whether you, your roof falls in next year because you know you, I’ve got my instruction from you. I’ve clarified to you the risks. You still instructed me. My job then is to go away and build you the best possible swimming pool I can with the money that you have available.

That, that would be my role. So as long as I had advised them and I was not negligent in my building in the swimming pool, which would mean I’d just pay someone else to go and do it because I’m not confident to build swimming pools. then I’ve satisfied my job. I’ve got no, no risk in that. And it’s exactly the same for surveyors carrying out surveys.

So if I’ve told you this level of survey would suit your property because of these reasons. And if you choose a different level, you are taking the risk. You come back to me in writing and say, Oh, I understand that. I’d still like to go ahead. As long as I carry out my survey in accordance with the requirements for that level of survey, then I covered myself, yeah. Surveyors, we don’t dictate it to our clients. We advise. We’ve got to be quite clear on that.

Matt Nally: Yeah. I think one of the important points as well, there is definitely put things in writing. I would always agree with that. And when it gives you a reminder of whether you did say something or not, because you can always think you had, yeah.

Did I say that on the phone? I can’t quite remember. It’s always there, but it definitely covers you later because it’s so hard to prove. Yes. We had a discussion on the phone or in person when we said this.

Tim Kenny: Yeah. Yeah. You can take your. You can take your contemporaneous notes, and that’s good. But yeah, there is, much as you can do by email.

Again, anything where it is that you are drifting away from the standards. Again, to touch on another point about standards, we have home survey standards and they’re a good document. They specify what what constitutes or what we should do under a level two survey, right?

They’re a, in effect, a minimum standard only. And also they don’t dictate. So we can’t, we’re free to ignore them as long as we put that in writing to our client. So, there are minimum, there’s a minimum standard in there. But we can, if we want to do more, we can do more, we can give more information, we can upgrade elements of a survey to level three, but most of it’s level two.

We can even exclude elements of the building. If there’s a section of the building that is, that they’re literally just going to knock down, if it’s an outbuilding or something that they’re going to knock down, you could choose in your terms to to exclude that, but you’ve got to put it in writing.

It has to be very clear. You can’t just issue out your standard terms. And, I think this is the thing that, that I think it’s important to get across to most of us is that, yeah, we’ve got the standards and yeah, we should be noting them and RICs can enforce those standards on us as members, but they don’t override our contractual relationship to our client.

I’ve not seen any evidence, I’ve not seen a single case or any other document that says to me RICs. Guidance overrules case law. Case law is, there, and then you’ve got, it’s not, case guidance is not legislation. It sits under case law in terms of the hierarchy. It’s a, it’ll, obviously the courts will take it into account, but we can exempt ourselves from it if we do it in the right way.

And again, I’m not saying we we try and offer a lower standards. We can use it as a minimum and go above it. But again, it’s just making sure we do it properly and we do it for the right reasons and we do it in writing when we need to.

Matt Nally: Yeah. That’s in terms of engagement an interesting one.

And we’ve covered this, I think we’ll be covering this on an episode coming up, but we have touched on it before where potentially sometimes they’re seen as just a tip box exercise. Yeah. Even if the customer just ticks to agree to a link online. And I don’t believe that’s compliant at all with the service standards in terms of personalization and so on.

But but it’s, I think exactly as you said, if you use them in the way that it properly outlines what you are providing and what you’re not providing it’s there, not just as a compliance aspect to tick box exercise, but actually just to make the whole process easier for both parties on what is and isn’t going to be.

In that final report expectations is that I think is how I look at it.

Tim Kenny: Yeah. One of the ones I kind of fact that when it comes to terms of engagement, actually getting them clients to read the terms of engagement that I actually, I, when I view that process, I’ve stolen a little bit from a kind of a sales.

Background with that. When you’re looking at the, the idea of the customer journey, so that we use the same journey for it, maybe for getting a client to book a survey, so you look at all of the touch points and see where the difficulties are, you try and remove those difficulties to make it as easy as it can be for them to make a purchase, right?

That’s a standard sales process. Apply the same thing to your terms of engagement. Make it as easy as possible for them to read them and not just agree with them, but read them and understand them, that take that same approach. And therefore you’re already starting that process of protecting yourself because we’ve all had the phone call from the client who phones up to moan or something about something.

And you actually got to know if you’d read your terms of engagement, you’d know about it. Of course, you find you’re legally protected, but nobody wants to have the unhappy client because they haven’t read the terms. Okay. Whether you’ve got, whether you’re liable or not, you’ve still got an unhappy client.

And to bring us back to the subject level three surveys, one of the reasons you might not want to do the level two, even though the client thinks the level two would be okay. It’s because they’re not going to be happy with it. I, if it’s the wrong survey for the property, they’re probably not going to be happy.

So again, there’s this kind of, yeah there’s the compliance and the liability, but also there’s the customer experience and the having happy customers who give you money and tell other people to give you money for the job. That’s, we’re all having to, what we do is, but we’re also having to make money as a business.

So you want them to go away really happy. So if you’re doing a level one survey on a 300 year old house, They’re not going to be that happy with that, are they? Very similar. I said to you there’s no reason within the guidance, no reason within the case law that you can’t do these, but actually the choice not to do it is probably going to be a commercial one, that’s how I view it.

Matt Nally: Yeah. I think it’s a very nice point, actually. It all should stem around. It’s around client needs, as you say, but that customer experience part and all of these points, the touch points from getting a quote to. Understanding the terms to the actual quality of report and stuff like that is all ultimately customer experience and then what drives you forward.

But I think that’s been a nice setup ready for topic two. For anyone else that wants to carry on listening, we’re about to go on to the basic requirements around level three surveys and everything you need to know.