Shared Ownership staircasing valuation dispute with Housing Association

housebuyer143

howardmeer said:

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.

It sounds like it's £0 due to this missing information, not because it's worth nothing. Have you outright asked the surveyor if it would be nil on the open market, because it's almost certain he will confirm that not to be the case. 

martindow

housebuyer143 said:

It sounds like it's £0 due to this missing information, not because it's worth nothing. Have you outright asked the surveyor if it would be nil on the open market, because it's almost certain he will confirm that not to be the case. 

If the surveyor considers it has a value, could he be persuaded to put that figure in writing?  The OP could then use this to do the staircasing.

There is a better chance of this being accepted by the housing association than zero.

user1977

martindow said:

housebuyer143 said:

It sounds like it's £0 due to this missing information, not because it's worth nothing. Have you outright asked the surveyor if it would be nil on the open market, because it's almost certain he will confirm that not to be the case. 

If the surveyor considers it has a value, could he be persuaded to put that figure in writing?

As I have said elsewhere, I think the point is that no surveyor is prepared to put a value on it given the immense uncertainty about the potential liabilities.

howardmeer

housebuyer143 said:

howardmeer said:

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.

It sounds like it's £0 due to this missing information, not because it's worth nothing. Have you outright asked the surveyor if it would be nil on the open market, because it's almost certain he will confirm that not to be the case. 

It is £0 due to the missing info which the HA was unable to provide (hence material uncertainty created by no knowledge of the cost of remedial works, time frame for works or Waking Watch costs and no guarantee of re-charge to leaseholder).
The valuation of £0 was based on RICS standard for valuing shared ownership - "open market" taking all factors into account.

howardmeer

martindow said:

housebuyer143 said:

It sounds like it's £0 due to this missing information, not because it's worth nothing. Have you outright asked the surveyor if it would be nil on the open market, because it's almost certain he will confirm that not to be the case. 

If the surveyor considers it has a value, could he be persuaded to put that figure in writing?  The OP could then use this to do the staircasing.

There is a better chance of this being accepted by the housing association than zero.

The valuation was £0 as per RICS guidance at the time, so surveyor is not willing to change that.
The HA did not even take the opportunity to discuss it with the surveyor at all - they just said they would not accept it.

Snookie12cat

Did I read that the HA are now looking to getting the cladding works costed/sorted?

If so, once the surveyor has the info he wants then would he put a value on it? If so, your best bet might be to get this info, get a value and hope its low because of the work needed doing. I imagine they will not entertain it because the value is £0/cant be valued. If it came back with a low value they would likely be more inclined to agree to the staircasing, esp because they have less argument over it since the required works are taken into account? 

MobileSaver

howardmeer said:

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.

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
How do you think the HA will prove him "manifestly wrong"

The HA will prove his valuation of zero manifestly wrong for the very reason the surveyor gave you for doing it. It's not a genuine, accurate valuation, it's an industry-accepted figure to put down on the form when there are unknowns preventing a true valuation to be given, which is exactly what the surveyor stated with his note of "material uncertainty".

Anyway, it's no-one here that you have to convince, it's the court and as stated I think you need to spend real money on more informed opinions before committing to thousands or tens of thousands on what I believe is a futile action. Good luck, you'll need it.

howardmeer

Snookie12cat said:

Did I read that the HA are now looking to getting the cladding works costed/sorted?

If so, once the surveyor has the info he wants then would he put a value on it? If so, your best bet might be to get this info, get a value and hope its low because of the work needed doing. I imagine they will not entertain it because the value is £0/cant be valued. If it came back with a low value they would likely be more inclined to agree to the staircasing, esp because they have less argument over it since the required works are taken into account? 

I hear what you are saying, but I don't follow the principle.

The HA is looking at getting the work done now (in 2022 to 2023), but the issue is the valuation was done in 2020 and that is what the Lease says - the value at the time of the valuation (i.e. not at some future point) and is only valid for 3-months. The HA just refused to accept the £0 valuation just because they didn't like it.
If it was the other way around, why could the SO not just say well, I don't like the valuation and I say prices will go down in 5 years time by 50%, so give me a 50% discount?   The principle is you have to follow what the wording of the lease says and that says SO are entitled to staircase at the value given by a RICS valuer at the time, and that value is binding on both parties.
The value now/today (two years on) is going to be much higher than £nil, but that is not relevant is it?

howardmeer

MobileSaver said:

howardmeer said:

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.

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
How do you think the HA will prove him "manifestly wrong"

The HA will prove his valuation of zero manifestly wrong for the very reason the surveyor gave you for doing it. It's not a genuine, accurate valuation, it's an industry-accepted figure to put down on the form when there are unknowns preventing a true valuation to be given, which is exactly what the surveyor stated with his note of "material uncertainty".

Anyway, it's no-one here that you have to convince, it's the court and as stated I think you need to spend real money on more informed opinions before committing to thousands or tens of thousands on what I believe is a futile action. Good luck, you'll need it.

I hear what you are saying - but it's not a "wrong" valuation if it follows the RICS guidance on SO valuations -what if it said £1, or £10, or £10,000 or £100,00? Who is to say what the "right" price is? I look at the lease and the Schedule where it sets out the staircasing provisions and the HA's written instructions.  HA can't just dispute the valuation because they don't like it; just like the SO can't just say they disagree with the valuation.  There should be a process here....

Someone else has suggested the SO try the First Tier Property/Land Tribunal on this as they deal with leaseholder disputes - the beauty of that is that it's costs-neutral, i.e. like the small claims, you can spend as much on lawyers as you want, but even if you lose (or win), you don't have to pay the other side's legal costs unless you've acte very unreasonably (the bar is set high on that).  Has anyone use this service for a lease valuation dispute?

housebuyer143

In my opinion that surveyor has followed RICS guidance but you think the £0 value is the houses value but as others have said, this is the surveyors way of saying "I can't value it" and he did say as much. Surveyors do this for all manner of reasons and it certainly doesn't mean it has no value, it's just he can't put a value on it without the correct info. Once he gets the info then I don't doubt you will get a value based on march 2020 prices. 

Its going up be a hard one to win and you really need to consider the cost involved in fighting it as there is no way the housing association will just give you 70% of the house for free without a long draw out legal battle.