The breakdown of a long term relationship or marriage is always a painful event for those concerned. However, emotional turmoil apart, most couples will have acquired significant assets during their time together which can also make a break up legally and financially complex. Divorce is considered to be one of the most traumatic events that a person can experience – with good reason, and dealing with the fair distribution of assets is a difficult business when each party is fighting for their own best interests – often with a dash of bitterness, anger or despair thrown into the mix.

The strength of the emotions involved is one of the reasons why the objectivity that divorce lawyers bring to the process is so important. However, whilst lawyers are experts in the law, they rarely have the in depth knowledge of the property market necessary to offer their clients the very best advice – which is where an expert valuer comes in. The family home is usually the most substantial investment that people make and if that family disperses, the permutations of what to do with any shared property are numerous.

Sadly, the necessity for property valuations as a result of relationship breakdown is becoming increasingly common, but the legal and financial process can be complex and confusing. If people want the right advice, it is always financially advisable to consult a property expert.

THE RIGHT QUALIFICATIONS

Valuing a property isn’t straightforward and even qualified, experienced professionals can struggle to ensure that a valuation is fair and accurate. Both housing and commercial markets are currently unstable, with significant regional variations thrown into the mix. All these factors make the valuation process a tricky business, which is why it is so important to use an experienced professional with qualifications from the Royal Institution of Chartered Surveyors (RICS). This way, people can ensure that the surveyor they use is well trained and subject to rigorous monitoring by their professional body. This also means that solicitors can be confident that they are offering the right advice and achieving the best deal for their clients. Furthermore, an independent valuer has no obligation to either party and is uninfluenced by self-interest, thus ensuring an objective and realistic valuation.

GETTING VALUE FOR MONEY

A legal representative naturally aims to get the best deal for their client – and this often includes keeping professional fees paid to outside agencies as low as possible to maximise any settlement. All too often, with this in mind, a solicitor will advise their client to simply call on the services of a couple of local estate agents for a basic valuation of the family home. These casually attained figures will then be used as a basis for negotiation over the division of assets. The problem with this is the number of variables involved in the process which an estate agent may not be fully qualified to appreciate, combined with the fact that the figures will then be used for legal purposes.

The professional valuer provides impartial advice on valuation matters that are often of huge significance.’

Whilst an estate agent will indeed be well placed to know the current market value of a property, they usually provide marketing appraisals for vending purposes, not valuations. Their primary role is to acquire a house to sell rather than satisfying the rather more onerous legal requirements of the divorce courts. This means that the figures used for marketing purposes may not always be satisfactory for the demands of negotiating a financial settlement.

A division of assets

Inevitably the division of assets acquired during a life together to the satisfaction of both parties is not an easy thing to achieve. Not surprisingly, there are many cases where the parties to the divorce or separation cannot, or will not, agree over the apportionment of assets. The reasons for these disagreements vary – who put in the larger share when the house was bought? Who pays the bulk of the bills? Who is going to live there after the separation is finalised? What about the children? What about maintenance? All these, and many other emotionally charged issues are brought to bear, sometimes with considerable animosity. Furthermore, if the valuation cannot be agreed, it is quite possible that the matter will end up before the courts, with the associated expense that this incurs. If this happens, it may be that the final decision will be taken entirely out of the hands of the parties involved.

Working together to find a solution

It is therefore very important for couples to obtain good professional advice at an early stage, so that agreement can be reached without the need for costly and sometimes lengthy legal proceedings. Of course, each party can arrange for their own professional valuation, but it is often more straightforward for one valuer to be appointed and for both parties to agree that the resultant valuation is accepted. This will mean that there is less to pay out in fees as the cost is usually split evenly between the parties, and it also avoids lengthy arguments. This is known as appointing a Single Joint Expert, and is often the preferred option when considered by solicitors and the courts. The valuer has a responsibility to both parties and can be challenged if necessary, either by the courts or by a party who feels that the valuation is wrong.

Fees are obviously payable for the professional valuation, and for any following work such as case conferences and court appearances. However, it is worth remembering that where the valuer is part of a company with estate agency services, it is quite likely that the cost of the valuation (not the ancillary work) will be deducted from any eventual sales commission should the property eventually be sold.

Our house, your house or my house?

When a couple buy their first property together, they rarely do so considering how the asset will be divided should they split. This means that there are often many legal pitfalls associated with property ownership, of which the layperson may not be aware. In fact, owning your home isn’t always a straightforward issue, but it’s important to get this right as the question of who owns how much of the house could affect the way the financial assessment is calculated.

There are two main ways of owning a house – tenants in common and joint tenants.

A joint tenancy, as the name suggests, is when all parties own the entire house. For example, a married couple who own their home as joint tenants will both own the property. This means that both parties would have to agree to any sale of the house.

Tenants in common own the house in separate shares, which may not be equal. They are not interlinked, and the owner of each share can determine its fate. This makes the valuation process more complex as it is necessary to determine the value of the part share based on its market value. It has been held that this value is not the same as dividing the full value of the property into the proportions held by the various parties. However, an allowance can be made to account for the difficulty in selling a part share, usually a minimum of 10 per cent. Higher percentages may be appropriate depending on the valuer’s opinion of the value of the share concerned, and its saleability. Couples who own their house in this way can determine what happens to their share – for example, it can be left in a will to children, family members, charities, etc. and this will obviously have an effect on the other party and their ability to use the house.

Divorce or separation may not be ideal, but it happens. When it does, it is important that the best interests of both parties are maintained, and that professionals be employed wherever possible. This will allow some of the highly charged atmosphere to be diffused, and a relationship of trust built between the parties and their advisers. In addition to their knowledge and expertise, professionals have the advantage of being emotionally detached from the process and have no interest in the differences that brought people to this place. They are there to provide impartial and unbiased advice on valuation matters that are often of huge significance. Nowhere is this more important than when it comes to matters of property and ownership and the fair division of assets.