Shared Ownership staircasing valuation dispute with Housing Association

Norman_Castle

howardmeer said:

Norman_Castle said:

howardmeer said:

deannagone said:

You have already posted about this situation https://forums.moneysavingexpert.com/discussion/6376091/staircasing-for-nil-valuation-cladding-hangover-advice-please#latest with more specific details.  I think those specific details are necessary for pertinent advice for this specialist area.

Fair point, but I am not getting any comments/advice regarding disagreements with HAs over valuations - that is what this thread is for.

There must be Shared Owners out there would have been in dispute with their HA about a valuation (whatever the case may be) and had to go through a process to resolve it - that's what I'm looking for...

The zero valuation is based on the fact it couldn't, shouldn't or wouldn't be sold with unresolved cladding problems. It clearly has a value which will be recognised once the cladding problem is resolved.

If you bought a car and Seller told you it had finance on it which if you bought it, you would be liable for, surely you'd ask "How much and when do I have to pay it off?"  If the answer was "Well, I'm not sure, but it could be £100,000s and you could have to pay it tomorrow or in a year, or in five/ten years." you'd probably walk away and ever look back right?

I'd walk away because its not possible to set a realistic price which is what the HA are doing. You're trying to force a loophole of the current situation. Its not unrealistic of the HA to reject the current valuation.

howardmeer

MobileSaver said:

howardmeer said:

MobileSaver said:

howardmeer said:

caprikid1 said:

There is a big difference between a valuation dispute and wanting a property for free.

in receipt of nil valuations

Isn't there a more fundamental flaw in your plan which is that if the valuation is zero then there is no consideration and so under UK law any contract is null and void? Or is there something else of value that the HA get if they give you the property for free?

the difference between a Deed of Sale (which this would be) and a contractual transaction

Good point and that's fine if both parties agree but I guess this comes back to can you force another party to execute a Deed of Sale without consideration? I suspect not.

Do you honestly believe the open market value of your property today is zero? If you offered it for sale on these forums would no-one offer you £100 cash for it? If the answer to either of these questions is no then the RICS valuation of nil is manifestly incorrect which would be another reason for the HA to declare the binding clause being null and void.

I see your point about forcing one side to something they don't want - i.e. the HA to sell at the nil valuation given. However, that is exactly what the Lease wording says - SO has the right to staircase at the valuation given by the surveyor and the value is binding upon both parties. A HA refusing to comply with the terms of lease is equally in breach as if the SO was in breach.

Please also consider that SO is talking about an application made in March 2020 - just before Covid lockdown and in the middle of the cladding crisis and no government help - if you remember, it was only in 2021/22 when Mr Gove replaced Mr Genrick that the Building Safety Fund came about. Before then (which is what the SO is talking about), nil valuations for cladding-affected buildings was the norm and all sales were grinding to a halt!   Of course, now/today, the valuation would be different, but SO is not talking about today's value...

On your point about offering £100 cash for it, the issue is more complex. Take into account that at the time (March 2020) anyone buying the property would also take on the potential unlimited liability of paying for Waking Watch costs and a proportion of any remedial costs - which could be anything.  This feels like the "BHS sold for £1" situation - you buy it for £1, but it carries with it £30m of liabilities...

howardmeer

Norman_Castle said:

howardmeer said:

Norman_Castle said:

howardmeer said:

deannagone said:

You have already posted about this situation https://forums.moneysavingexpert.com/discussion/6376091/staircasing-for-nil-valuation-cladding-hangover-advice-please#latest with more specific details.  I think those specific details are necessary for pertinent advice for this specialist area.

Fair point, but I am not getting any comments/advice regarding disagreements with HAs over valuations - that is what this thread is for.

There must be Shared Owners out there would have been in dispute with their HA about a valuation (whatever the case may be) and had to go through a process to resolve it - that's what I'm looking for...

The zero valuation is based on the fact it couldn't, shouldn't or wouldn't be sold with unresolved cladding problems. It clearly has a value which will be recognised once the cladding problem is resolved.

If you bought a car and Seller told you it had finance on it which if you bought it, you would be liable for, surely you'd ask "How much and when do I have to pay it off?"  If the answer was "Well, I'm not sure, but it could be £100,000s and you could have to pay it tomorrow or in a year, or in five/ten years." you'd probably walk away and ever look back right?

I'd walk away because its not possible to set a realistic price which is what the HA are doing. You're trying to force a loophole of the current situation. Its not unrealistic of the HA to reject the current valuation.

The missing piece is that the HA are obliged under the terms of the Lease to sell it on Application and the Valuers valuation is binging on both parties - that's pretty standard on old SO Leases. It's very SO's right under the terms of SO Lease and the only real benefit of the process...  The HA have no "right" to refuse the Application if it's made according to the terms of the Lease and their own official Guidance... 

Norman_Castle

Tried asking here? https://www.lease-advice.org/

howardmeer

Norman_Castle said:

Tried asking here? https:

Thanks for that link Norman_Castle.

Tried them for advice already -they confirmed the position as sound, but said only a Court can make final decision... which guess where this is heading...

MobileSaver

howardmeer said:

MobileSaver said:

howardmeer said:

MobileSaver said:

howardmeer said:

caprikid1 said:

There is a big difference between a valuation dispute and wanting a property for free.

in receipt of nil valuations

Isn't there a more fundamental flaw in your plan which is that if the valuation is zero then there is no consideration and so under UK law any contract is null and void? Or is there something else of value that the HA get if they give you the property for free?

the difference between a Deed of Sale (which this would be) and a contractual transaction

Good point and that's fine if both parties agree but I guess this comes back to can you force another party to execute a Deed of Sale without consideration? I suspect not.

Do you honestly believe the open market value of your property today is zero? If you offered it for sale on these forums would no-one offer you £100 cash for it? If the answer to either of these questions is no then the RICS valuation of nil is manifestly incorrect which would be another reason for the HA to declare the binding clause being null and void.

that is exactly what the Lease wording says - SO has the right to staircase at the valuation given by the surveyor

Even if there is no "manifest error" clause anywhere within the Lease, you enforce contracts in court and would need some pretty solid evidence that the valuation of nil was valid.

Unless you have proof that the costs of remedial work at that time are/were more than the value of the remediated property I think you are going to struggle.

nil valuations for cladding-affected buildings was the norm and all sales were grinding to a halt

Did absolutely all sales grind to a halt or were any cladding-affected properties still sold to cash buyers? (Which would significantly weaken your argument.)

howardmeer

MobileSaver said:

howardmeer said:

MobileSaver said:

howardmeer said:

MobileSaver said:

howardmeer said:

caprikid1 said:

There is a big difference between a valuation dispute and wanting a property for free.

in receipt of nil valuations

Isn't there a more fundamental flaw in your plan which is that if the valuation is zero then there is no consideration and so under UK law any contract is null and void? Or is there something else of value that the HA get if they give you the property for free?

the difference between a Deed of Sale (which this would be) and a contractual transaction

Good point and that's fine if both parties agree but I guess this comes back to can you force another party to execute a Deed of Sale without consideration? I suspect not.

Do you honestly believe the open market value of your property today is zero? If you offered it for sale on these forums would no-one offer you £100 cash for it? If the answer to either of these questions is no then the RICS valuation of nil is manifestly incorrect which would be another reason for the HA to declare the binding clause being null and void.

that is exactly what the Lease wording says - SO has the right to staircase at the valuation given by the surveyor

Even if there is no "manifest error" clause anywhere within the Lease, you enforce contracts in court and would need some pretty solid evidence that the valuation of nil was valid.

Unless you have proof that the costs of remedial work at that time are/were more than the value of the remediated property I think you are going to struggle.

nil valuations for cladding-affected buildings was the norm and all sales were grinding to a halt

Did absolutely all sales grind to a halt or were any cladding-affected properties still sold to cash buyers? (Which would significantly weaken your argument.)

On the Court point, I think "the burden of proof" would/should fall on the HA to prove the valuation is invalid - SO followed the HA written instructions, official Guidance on staircasing procedure and what the Lease says (the Lease actually says the valuation is binding on both parties, so no "appeal" or "dispute" procedure at all. 

It would have to be on the HA to show the property was worth more than the cladding cost/liability at that time - they were asked and they could give a figure or time frame, nor could they guarantee leaseholder would not be liable for the cost...

I can't at the moment tell if the few sales that did go through in March/April 2020 was unaffected properties, and nor, it seems, can the HA. Thanks for pointing out though...

caprikid1

"On the Court point, I think "the burden of proof" would/should fall on the HA to prove the valuation is invalid - SO followed the HA written instructions, official Guidance on staircasing procedure and what the Lease says (the Lease actually says the valuation is binding on both parties, so no "appeal" or "dispute" procedure at all."

Given the numbers that we are talking about here potentially millions of pounds I suspect the HA will put a fair chunk of money behind this in terms of barristers etc if you were ever to find the funds to get it even close to that.

MobileSaver

howardmeer said:

MobileSaver said:

howardmeer said:

MobileSaver said:

howardmeer said:

caprikid1 said:

There is a big difference between a valuation dispute and wanting a property for free.

in receipt of nil valuations

Isn't there a more fundamental flaw in your plan which is that if the valuation is zero then there is no consideration and so under UK law any contract is null and void? Or is there something else of value that the HA get if they give you the property for free?

the difference between a Deed of Sale (which this would be) and a contractual transaction

Good point and that's fine if both parties agree but I guess this comes back to can you force another party to execute a Deed of Sale without consideration? I suspect not.

Do you honestly believe the open market value of your property today is zero? If you offered it for sale on these forums would no-one offer you £100 cash for it? If the answer to either of these questions is no then the RICS valuation of nil is manifestly incorrect which would be another reason for the HA to declare the binding clause being null and void.

at the time (March 2020) anyone buying the property would also take on the potential unlimited liability of paying for Waking Watch costs and a proportion of any remedial costs - which could be anything.  This feels like the "BHS sold for £1" situation - you buy it for £1, but it carries with it £30m of liabilities...

In your other thread you mentioned your lawyer thought your argument was sound but at the same time they must have had some reservations if they weren't confident of the likelihood of success.

For the avoidance of doubt, have you spoken to the surveyor post-valuation and they have confirmed the property was literally worth nothing (which I and I'm sure most others find very hard to believe) at that time? (I ask because there are several references suggesting a "nil valuation" actually means they are unable to value but have to fill in something on the form so they use "0" but it really means "n/a" rather than zero.) Even if your surveyor attends court and confirms the value on the open market was zero, I think the HA would find it quite easy to prove that was manifestly wrong.

One possible result in court of course is that you win a pyrrhic victory; the court orders the HA to transfer the property for free but also orders you must cover "unlimited liability of paying for Waking Watch costs and a proportion of any remedial costs"...

As others have said you are going to need very deep pockets to fight this and I don't rate your chances at all.

howardmeer

MobileSaver said:

howardmeer said:

MobileSaver said:

howardmeer said:

MobileSaver said:

howardmeer said:

caprikid1 said:

There is a big difference between a valuation dispute and wanting a property for free.

in receipt of nil valuations

Isn't there a more fundamental flaw in your plan which is that if the valuation is zero then there is no consideration and so under UK law any contract is null and void? Or is there something else of value that the HA get if they give you the property for free?

the difference between a Deed of Sale (which this would be) and a contractual transaction

Good point and that's fine if both parties agree but I guess this comes back to can you force another party to execute a Deed of Sale without consideration? I suspect not.

Do you honestly believe the open market value of your property today is zero? If you offered it for sale on these forums would no-one offer you £100 cash for it? If the answer to either of these questions is no then the RICS valuation of nil is manifestly incorrect which would be another reason for the HA to declare the binding clause being null and void.

at the time (March 2020) anyone buying the property would also take on the potential unlimited liability of paying for Waking Watch costs and a proportion of any remedial costs - which could be anything.  This feels like the "BHS sold for £1" situation - you buy it for £1, but it carries with it £30m of liabilities...

In your other thread you mentioned your lawyer thought your argument was sound but at the same time they must have had some reservations if they weren't confident of the likelihood of success.

For the avoidance of doubt, have you spoken to the surveyor post-valuation and they have confirmed the property was literally worth nothing (which I and I'm sure most others find very hard to believe) at that time? (I ask because there are several references suggesting a "nil valuation" actually means they are unable to value but have to fill in something on the form so they use "0" but it really means "n/a" rather than zero.) Even if your surveyor attends court and confirms the value on the open market was zero, I think the HA would find it quite easy to prove that was manifestly wrong.

One possible result in court of course is that you win a pyrrhic victory; the court orders the HA to transfer the property for free but also orders you must cover "unlimited liability of paying for Waking Watch costs and a proportion of any remedial costs"...

As others have said you are going to need very deep pockets to fight this and I don't rate your chances at all.

Lawyers being lawyers, said the case was sound, however he could not actually refer to a similar or other case at that time - based on this fact, he was not able to give a better than 50/50 chance of success. That is normal when there is no precedent a lawyer can refer to.
The surveyor stands by his valuation as being in compliance with his instructions on valuing shared ownership properties and he says, RICS advice at that time (which he says is to give £nil valuations when the cost or time frame for remedials works is unknown and there is no guarantee from the freeholder that the cost will not be re-charged to the property owner). He does not say "the property is worth something", he simply says you asked me to do a SO valuation according to the RICS guidance, and that is what I did.
How do you think the HA will prove him "manifestly wrong" without going outside the scope of the lease terms which states specifically (and for good reasons) a party who wants to staircase has to get a valuation from an independent  RICS surveyor (which the SO did)?  So followed the instructions and guidance of the HA to the letter - they are now simply disputing the result of their own policy.