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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 10239
Experience:  I have been practising for 30 years.
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We own some units on an industrial estate. The end unit, not

Customer Question

We own some units on an industrial estate. The end unit, not owned by us, also owns the access road outside their unit. We have a right of way to use that road to get to both our units.
The 3 units are being sold for redevelopment to one developer, meaning there will be 1 pot of money to be divided between the 3 units. The owner of the end unit wants to divide the sales value in accordance with the land i.e he wants to keep the land value of the access road. This doesn’t seem fair to us as all the units re priced the same in the existing state (if they were sold as units and not for redevelopment). By doing this it is inflating the value of the end unit to almost double due to the size of the private road.
Submitted: 1 year ago.
Category: Law
Expert:  F E Smith replied 1 year ago.

How many units are there?

Are they being sold?

Why are the sale proceeds being divided between the four units?

Why is there only one pot of money to be divided?

Normally, each of the units would attract its own price and that can be however much the seller wants to charge.

Can you please explain the fine detail? Thank you

Customer: replied 1 year ago.
Okay, there are 3 units, the developer is purchasing the 3 units as a "job lot" as 2 are owned by the father and 1 by the son. They have "done a deal" with the developer for a specific sum of money for the 3 units. The issue has arisen when they decide how the "pot" is to be divided between them! The end unit owns the access road which is making the total area of unit 1 much larger in proportion to the other 2. Do the other 2 units have any right to any share of the "pot" allocated to the access road?
Customer: replied 1 year ago.
I am attaching a plan of the 3 units
Expert:  F E Smith replied 1 year ago.

Thank you. That explains partly.

The legal situation here is that there are three units.

There would be three contracts for the sale and purchase and three transfer deeds from each seller to the buyer .

The two properties owned by the same person would actually be combined into the same contract although the transfer deed does need to be a separate document.

Each contract is conditional upon the other contracts so that the developer doesn’t get stuck with either two properties or one property and the other one changes their mind or decides to move the goalposts.

The situation is that the developer is paying a chunk of money for three properties and it’s up to the sellers how they decide that is divided. In essence, if each of the sellers does not get enough money from the sale, the whole thing does not go ahead. It is as simple as that. Each seller decide on the price they want for their unit and if they don’t get enough, they hang onto it and the whole thing falls apart. Hence, if the end unit with the part of the access wants more money for his bit for whatever reason and the other two do not agree with that, the whole thing falls apart. There is no formula to say that the end unit in this case is automatically entitled to get more money than the other two.

Purely from a valuation point of view, unit 1 is worth more because it has a bigger footprint and ultimately, if the complete site was flattened, and it was used for some other purpose, larger part of the land is worth more in proportion.

To answer your question as to whether the other two units have any right to share any of the pot allocated to the access road: there is no automatic right, it is simply a case of whether it is enough money to keep the sellers of those two units happy and they don’t get enough, they walk away and the whole thing falls apart. It really is a case of either being happy with the amount of money that is on the table and proceeding with the sale or not being happy and backing out.

Can I clarify anything for you?

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Best wishes


Customer: replied 1 year ago.
Our issue is we have difficulty in understanding how the value of the access road will be more than the value of the car parks or buildings. In addition there is quite a sizeable easement ( public sewer) on the access road which cannot be built over. Any advice as to how we should proceed would be appreciated.
Expert:  F E Smith replied 1 year ago.

If you have not already exchanged contracts on this, the easiest way is to get an independent valuer to value each of the units to give an overall figure which is the figure they are being sold for. All selling parties would need to agree to be bound by the values decision. Other than that, it really is a case of thrashing it out between you because there is no legal intervention that would assist you here. He is at liberty to withdraw from the sale if he doesn’t get what he wants.