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Clare
Clare, Solicitor
Category: Property Law
Satisfied Customers: 34579
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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My parent has a 20% share of a rental property with my uncle

Resolved Question:

My parent has a 20% share of a rental property with my uncle & his wife owning 80%. My parent wants to be bought out of the property.
What are the steps we're supposed to follow and which professionals are involved at which stage?
How do we get a valuation that is fair?
Ask for 3 open valuations by estate agents and take the middle valuation?
Get someone? to do a mortgage valuation? Just one or more?
Get someone? to do a rebuild valuation? Just one or more?Then we calculate the income & outgoings and deduct or add that to the agreed valuation? An accountant? Specific type?Agree the payment terms?Then a lawyer to draw up the paperwork?
Submitted: 20 days ago.
Category: Property Law
Expert:  Clare replied 20 days ago.

Thank you for your question

My name is Clare

I shall do my best to help you but I need some further informtaion first

Have annual rental accounts been produced each year?

Customer: replied 20 days ago.
My parent has submitted tax returns based on the bank statements my uncle has sent to us and copies of invoices. My uncle & aunt withdraw money but we have taken nothing for a few years.
Expert:  Clare replied 20 days ago.

How much are they owed from the property?

Have your Uncle and his wife agreed to purchase your parents share of the property?

Customer: replied 20 days ago.
Simple question to ask me but I don't have figures at my fingertips. A few years back both they and my parent put in a substantial amount to rehab the place but they put substantially more because we had a budget in mind which far exceeded and we stated the rest of my parent's share would have to be deducted from the rental income which has been happening as far as tax returns have been happening.
I have tried to find an accountant to help me get the figures in order and then a working formula to make it easier to calculate but first one left me hanging for a long time after I sent the data, then said they'd rather not do it. Then after a lengthy discussion with another accountant where we agreed what needed doing, I sent all the data and he never replied to the numerous phone calls, texts and emails I sent! Now got to push myself to find a third one!My uncle & his wife agreed finally end of last year that they too would like to buy my parent out and asked us what figure we wanted. I proposed in November that they got three property valuations done by estate agents and even used a valuation I had done back in 2015. In Feb I got an email back from them saying they would get valuations done at half term. They forgot. I sent them a reminder this month and they have come back to me today saying their accountant is saying that it must be a mortgage valuation, not open market valuation and that since "August" he has been searching in the whole region for a mortgage valuation person and can't find one!
I am holding back from replying immediately that estate agents can provide mortgage valuations if you ask them, but then I hesitated as I wasn't sure if I was right to suggest current market value or that he may well be right (other than his futile google search for a mortgage valuation) to request that lower value if their accountant says so. I don't know where to get a referenced statement of how to get valuations done when selling to co-owner(s). It's annoying that the step-by-step process is not visibly public for us to not need to get conflicting information from other interested & non-interested parties and it raises a trust/hidden agenda issues with co-owners
Expert:  Clare replied 20 days ago.

That is nonsense.

I suggest that you write and inform them that their accountant is incorrect and since the property will have to be sold if no agreement is reached it is an open market valuation that is required.

Give then a 28 day deadline to obtain the three valuations and inform them that if they fail to do so then you will arrange for an Estate Agent to attend the property and complete a valuation and remind him that since you parent is a joint owner they has an absolute right of entry.

Work on the figures for the renovations and the figures given for tax returns and create a set of accounts.

Inform your Uncle that unless you receive properly evidenced accounts within 28 days then you will use the figure that you have assessed.

If a buy out figure is agreed then your Uncle need to instruct a conveyancer - as does your parent

I hope that this is of assistance - please ask if you need further details

Customer: replied 19 days ago.
Much as I'd like to put a deadline on this action, I fear that the current quiet but tense climate would erupt and my parent is not geared for this. I guess I can put that firmness on once we are also ready with the account information being prepared correctly with the current data we have. All owners have a habit of writing emails like letters...months apart.
Sorry for going quiet myself lastnight - had to disappear quickly from where I had access to this information.
I'm trying to send a kindly "you're wrong about mortgage valuation figure" now and I guess [email protected] understanding from you there's no process reference documented somewhere that I could send them the link for them to deem it plausible and not made up by me saying I've had a quick consultation with a property lawyer?
Useful to know both sets of owners need to get a conveyancer each once the figure has been agreed.
Expert:  Clare replied 19 days ago.

The closest I can find is the fact sheet here

https://www.slatergordon.co.uk/media/2347003/land-disputes-a-guide-to-procedure.pdf

Customer: replied 18 days ago.
I have persevered with looking through that document and a few others. Useful for if we get to court situation (seeing my parent's face, I sense we'll have to wait until the place become's my responsibility), but can't find any phrase about co-owners buying each other out need to get an open market valuation. Only found one solicitor's website saying open market valuation should be used. The context wasn't quite right but might be all I can do if I am challenged again.
Thank you for looking. I know another two cases of a sibling waiting to be bought out by another. The hurt and closure of communication channels is so sad and needless.
Expert:  Clare replied 18 days ago.

It is painful I know

The position is that if no agreement is reached the default position is that the property HAS to be sold on the open market - which is why the open market valuation is the correct one

Customer: replied 18 days ago.
I find that useful, I just know it's not the phrase that I want to use to justify if they come back with their way of handling this.A friend has just found this article which might be gentle enough for them if they challenge us
https://amp.theguardian.com/money/2006/sep/06/expertsproperty.property
Expert:  Clare replied 17 days ago.

Yes that may help!

Customer: replied 14 days ago.
Thank you for your helpful responses even if I know some of them are too daunting to do still and hopefully won't have to. I suspect they will reply as soon as I close this with another spanner in the works but can't keep this open forever.
Customer: replied 14 days ago.
Thank you for your helpful responses even if I know some of them are too daunting to do still and hopefully won't have to. I suspect they will reply as soon as I close this with another spanner in the works but can't keep this open forever.
Sorry forgot to check again , the payment terms come after the valuation has been done and agreed - does the conveyancer help guide us through that or do we inform the conveyancer of the payment terms? Your suggested payment terms are helpful but do we have to propose them to each other or is it best to get the accountant who helps us put the accounts to date back in order to make best suggestion. They have told my parent that they have put money aside and are anxious to reinvest it if we don't agree. They had forgotten somehow that they had not done the valuations (back in November last year was when they said they'd do it during February half term. We didn't push after as we thought perhaps they didn't visit the area and didn't know when they would next until they sent us an email asking us why there was a hold up from our side!
Anyway, I'm a little nervous about how the payment terms are suggested to each other - volley a tennis ball back & forth or have a professional involved if we reach stalemate?
Expert:  Clare replied 14 days ago.

ok

At this point

1. get three valuations and agree to go either with the average or middle one

2. Get the basics of the accounts - who owes what from the accountant

3. Agree a figure

4. They instruct a ocnveyancer

Customer: replied 14 days ago.
4. So they instruct a conveyancer not my parent as well? Sorry understood from earlier writings above that they would have conveyancer each although that sounded excessive to me.
The conveyancer helps them work out payment terms if they can't pay 100% and then sends proposal to my parent
Expert:  Clare replied 14 days ago.

No, the Conveyancer just deals with the legal paperwork.

It is for them to work out what they can afford and to negotiate with you regarding payment

Customer: replied 14 days ago.
4. So they instruct a conveyancer not my parent as well? Sorry understood from earlier writings above that they would have conveyancer each although that sounded excessive to me.
The conveyancer helps them work out payment terms if they can't pay 100% and then sends proposal to my parent
Are there other valuations of the property from the history that we need to be aware of from tax implications? For instance I think the property was bought in 1970s and was in my Grandma's will when she died in the 80s and my Father was one of the heirs and then he died in 2006 and I got a probate value for that purpose. I have no idea if my uncle has the values for any other than when my Father's probate value was done. Who/How is an estimate done if there are other valuations from the property's history we need?
Expert:  Clare replied 14 days ago.

No the conveyancer does not work out payment terms - that is for your Uncle to offer

The only other valuation that is needed is the value at the time of your father's probate

Clare and other Property Law Specialists are ready to help you
Customer: replied 14 days ago.
Oh I was thinking there would be other values to know about. That's good!
Okay thank you!