House previously bought at undervalue: can my transaction be voided?

user1977

martindow said:

Would a RICS valuation be helpful here in determining whether the price with a tenant in situ was under value or not?  Could this be relied on to protect the OP from a possible future claim?

Yes, but the insurance would probably be cheaper than a valuation!

The OP's solicitor should be finding solutions for them, not lobbing problems and leaving them to flounder around on web forums to sort it out.

Hoenir

user1977 said:

martindow said:

Would a RICS valuation be helpful here in determining whether the price with a tenant in situ was under value or not?  Could this be relied on to protect the OP from a possible future claim?

The OP's solicitor should be finding solutions for them, not lobbing problems and leaving them to flounder around on web forums to sort it out.

Not the role of the solicitor to determine if a problem even exists. Not that there'll be any accessible information on the public record. Sometimes it comes down to gut instinct and sensing that something isn't right. Although you cannot put your finger on precisely what. 

user1977

Hoenir said:

user1977 said:

martindow said:

Would a RICS valuation be helpful here in determining whether the price with a tenant in situ was under value or not?  Could this be relied on to protect the OP from a possible future claim?

The OP's solicitor should be finding solutions for them, not lobbing problems and leaving them to flounder around on web forums to sort it out.

Not the role of the solicitor to determine if a problem even exists. Not that there'll be any accessible information on the public record. Sometimes it comes down to gut instinct and sensing that something isn't right. Although you cannot put your finger on precisely what. 

It seems to be the solicitor's (misplaced, IMHO) gut instinct which has triggered the whole problem.

lb00

Hoenir said:

user1977 said:

martindow said:

Would a RICS valuation be helpful here in determining whether the price with a tenant in situ was under value or not?  Could this be relied on to protect the OP from a possible future claim?

The OP's solicitor should be finding solutions for them, not lobbing problems and leaving them to flounder around on web forums to sort it out.

Not the role of the solicitor to determine if a problem even exists. Not that there'll be any accessible information on the public record. Sometimes it comes down to gut instinct and sensing that something isn't right. Although you cannot put your finger on precisely what. 

user1977 said:

Hoenir said:

user1977 said:

martindow said:

Would a RICS valuation be helpful here in determining whether the price with a tenant in situ was under value or not?  Could this be relied on to protect the OP from a possible future claim?

The OP's solicitor should be finding solutions for them, not lobbing problems and leaving them to flounder around on web forums to sort it out.

Not the role of the solicitor to determine if a problem even exists. Not that there'll be any accessible information on the public record. Sometimes it comes down to gut instinct and sensing that something isn't right. Although you cannot put your finger on precisely what. 

It seems to be the solicitor's (misplaced, IMHO) gut instinct which has triggered the whole problem.

I really don't know how these companies that do property flipping operate so wouldn't be able to judge whether the sale happened at an undervalue. It is true they bought this flat with other two flats from the same owner (a portfolio purchase, as they call it), so this would likely call for a discount, and compared to my situation they bought it with a tenant in situ and expedited the conveyancing process by not raising enquiries.

My main question is: does this justify a price that is £100k lower than what I am paying, given that the two sales occurred only a few months apart?

I would be willing to take out insurance, but even to do so, I need details from the seller and a declaration from them stating they bought at undervalue.

Thanks

Hoenir

user1977 said:

Hoenir said:

user1977 said:

martindow said:

Would a RICS valuation be helpful here in determining whether the price with a tenant in situ was under value or not?  Could this be relied on to protect the OP from a possible future claim?

The OP's solicitor should be finding solutions for them, not lobbing problems and leaving them to flounder around on web forums to sort it out.

Not the role of the solicitor to determine if a problem even exists. Not that there'll be any accessible information on the public record. Sometimes it comes down to gut instinct and sensing that something isn't right. Although you cannot put your finger on precisely what. 

It seems to be the solicitor's (misplaced, IMHO) gut instinct which has triggered the whole problem.

If opinion is all that mattered. Solicitors wouldn't need to be highly qualified people that operate under regulatory supervision. 

silvercar

I know it isn’t identical, but I’ve been reading articles where a jointly owned property is valued where one of the owners remains and the other moved out eg a couple where one needs care and the property is owned 50/50. The standard is that the 50% ownership is devalued by 15% to account for the property being occupied. So taking 85% of the empty valuation to allow for the tenant may not be unreasonable in some cases eg a tenant with sitting tenants rights or a very reduced rent. Of course, for an investor in BTL buying a property with a tenant paying market rent, there is no discount at all.

silvercar

Is your solicitor local? Does he know the area?

I would be asking him/ her by email or in writing whether his undervalue opinion still stands given that you have established that there was a tenant and the purchase was part of a portfolio purchase. 

Personally, if it was in my area, I would think both those factors would influence the price and I wouldn’t be concerned. 

BikingBud

lb00 said:

Hoenir said:

user1977 said:

martindow said:

Would a RICS valuation be helpful here in determining whether the price with a tenant in situ was under value or not?  Could this be relied on to protect the OP from a possible future claim?

The OP's solicitor should be finding solutions for them, not lobbing problems and leaving them to flounder around on web forums to sort it out.

Not the role of the solicitor to determine if a problem even exists. Not that there'll be any accessible information on the public record. Sometimes it comes down to gut instinct and sensing that something isn't right. Although you cannot put your finger on precisely what. 

user1977 said:

Hoenir said:

user1977 said:

martindow said:

Would a RICS valuation be helpful here in determining whether the price with a tenant in situ was under value or not?  Could this be relied on to protect the OP from a possible future claim?

The OP's solicitor should be finding solutions for them, not lobbing problems and leaving them to flounder around on web forums to sort it out.

Not the role of the solicitor to determine if a problem even exists. Not that there'll be any accessible information on the public record. Sometimes it comes down to gut instinct and sensing that something isn't right. Although you cannot put your finger on precisely what. 

It seems to be the solicitor's (misplaced, IMHO) gut instinct which has triggered the whole problem.

I really don't know how these companies that do property flipping operate so wouldn't be able to judge whether the sale happened at an undervalue. It is true they bought this flat with other two flats from the same owner (a portfolio purchase, as they call it), so this would likely call for a discount, and compared to my situation they bought it with a tenant in situ and expedited the conveyancing process by not raising enquiries.

My main question is: does this justify a price that is £100k lower than what I am paying, given that the two sales occurred only a few months apart?

I would be willing to take out insurance, but even to do so, I need details from the seller and a declaration from them stating they bought at undervalue.

Thanks

Isn't that the risk in question?

If you get that statement there is no risk but a fact!

And an issue that you might have to manage as they have now provided an opening for recovery against the original vendor.

lb00

silvercar said:

Is your solicitor local? Does he know the area?

I would be asking him/ her by email or in writing whether his undervalue opinion still stands given that you have established that there was a tenant and the purchase was part of a portfolio purchase. 

Personally, if it was in my area, I would think both those factors would influence the price and I wouldn’t be concerned. 

The rent being paid is at market level, so the discount is really just because the tenant is already living there and we're buying three flats from the same person. The flat's condition hasn't changed, no renovations have been done.

Yes, my solicitor is local, but I'm not too happy with him. He's very cautious and always brings up a lot of concerns, but in my opinion, he can't really solve them in a practical way. Still, we are very close to exchange now so changing solicitor is not a viable option.

Hoenir

lb00 said:

silvercar said:

Is your solicitor local? Does he know the area?

I would be asking him/ her by email or in writing whether his undervalue opinion still stands given that you have established that there was a tenant and the purchase was part of a portfolio purchase. 

Personally, if it was in my area, I would think both those factors would influence the price and I wouldn’t be concerned. 

The rent being paid is at market level, so the discount is really just because the tenant is already living there and we're buying three flats from the same person. The flat's condition hasn't changed, no renovations have been done.

Why would the previous seller give away a £100k.......... makes no sense at all.