Co-Owner Valuation Dispute

ncjharris

Hi all,

I'm after a bit of advice on the valuation of a property co-owned by two people with a view to one buying the other out.

A brief background;

A friend of mine bought a house with another friend 18 months ago. Their relationship has deteriorated and the other party now wants to 'cash-out'
There is no disagreement that this needs to happen - for reasons I won't go into - the other party needs to be gone.

In November last year the other party verbally agreed to an amount representative of his share of the property. He elected to move out of the property around this time.
The offer was formalised and sent for his acceptance, at which point he decided he could get more for it and appointed a solicitor to act for him - cue a lot of legal and confrontational letters. My friend has elected not to appoint solicitors; partially as she can't afford it but also as she still believes it can be resolved amicably. 

The original offer was refuted and - eventually after a lot of letters with no substance but a lot of threats - a counter offer was made. This was based on Zoopla and was woefully inaccurate - it could be easily seen that the local properties were selling for sums well under this.  

At the time of purchasing the property a Declaration of Trust was drawn up but, it transpires, was never signed and returned by the other party (who had it after my friend had signed it and passed it to him to return to the conveyancing solicitors).
Notwithstanding this, the other parties solicitors have relied on this for the steps for one party to buy out another and my friend is prepared to follow this.

The declaration of trust states that if an agreement can't be reached then the property shall be valued by three estate agents. In order to move things forward, my friend arranged for three valuations - which came in and, unsurprisingly, valued his share to within £500 of the original offer. 

All this has now been sent back to the other parties solicitor, along with the calculation based on details in the Declaration of Trust, but now his solicitors have come back stating that they will be undertaking their valuations. No reason given, just that they will!
The general consensus is that the other party is being deliberately obstructive and trying to antagonise my friend, but obviously this can't be proved! 

So my question is this - if a Declaration of Trust exists that explicitly sets out the grounds for a valuation process and this has been done, what grounds can someone disagree with it? Can valuations 4 & 5 be ignored, given that 1, 2 & 3 have been undertaken?

  

MWT

ncjharris said:

So my question is this - if a Declaration of Trust exists that explicitly sets out the grounds for a valuation process and this has been done, what grounds can someone disagree with it? Can valuations 4 & 5 be ignored, given that 1, 2 & 3 have been undertaken? 

The obvious grounds in this case are simply that there is no Declaration of Trust as it was never signed by both parties...

ncjharris said:

Notwithstanding this, the other parties solicitors have relied on this for the steps for one party to buy out another and my friend is prepared to follow this.

Merely using the same methodology doesn't mean they have 'relied' on the unsigned 'Declaration of Trust', these tend to follow a fairly standard format, they would only be relying on it if they sought to enforce terms in it on your friend, citing the Declaration as the justification, but they would be unlikely to do that knowing that their client has not signed it.

Does your friend have any evidence that the other party committed to sign the Declaration, or even confirmed that they had signed it before completion?

Ultimately I admire your friends conviction that this can still be settled amicable without her needing to engage legal advice, but the events you describe would suggest otherwise...  

getmore4less

There may be a constructive trust in place as there are indications of the intentions even though not signed.

At the time of purchasing the property a Declaration of Trust was drawn up but, it transpires, was never signed and returned by the other party (who had it after my friend had signed it and passed it to him to return to the conveyancing solicitors).

Were the conveyancing solicitor aware of the trust deed?
Who drew up the trust deed for signing?

Is the issue issue just one of valuation?

There is no issue with the distribution of beneficial interests?

if that's the case then the simple solution to the valuation issue is call then out. a put up or shut up.

They either swap the buyer out at the higher value or put it on the market and sell.

out of interest

How far apart are the effective offers?

What was the beneficial interest agreement,  see loads on here that are very poor.