Property dream turns into legal nightmare

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The Independent Online
THE DIFFICULTIES encountered by interior designer Yolanda Lee- Jefferson are not uncommon. Ms Lee-Jefferson has recently served a writ on Stephen Plant, alleging that the pair made a verbal agreement to look for a suitable property to renovate.

Under this agreement, Ms Lee-Jefferson says, they agreed that the net profit on the sale would be shared equally and that any antiques provided for the property by her would either be sold, with the couple splitting the profit, or alternatively she would receive half of any appreciation in their value.

In 1984 a suitable house was bought by Mr Plant, apparently for about pounds 300,000, in St John's Wood, London. The 22-room property with its staff cottage was, the writ claims, in a state of great disrepair. It was agreed that for financial reasons the couple should move into the property.

According to Ms Lee-Jefferson, over the next five years she redesigned, renovated and refurbished the property so that by the end of 1988 it had increased greatly in value. In 1989, after "unhappy differences", she left Mr Plant and the house. He then sold the property, apparently for about pounds 1.3m.

Ms Lee-Jefferson alleges that, in breach of their oral agreement, he has has failed to pay her either 50 per cent of the increase in the value of the property or 50 per cent of the appreciation in the value of the antiques and other furnishings she purchased. The dispute will now probably be decided by the courts. Ms Lee-Jefferson's solicitors, when approached by the Independent on Sunday, declined comment. Mr Plant's solicitors were not contactable.

Disputes frequently occur when cohabitees split up and sell their home. Denzil Lush, an Exeter solicitor and author of Co-habitation and Co-ownership Precedents, comments: "The best policy when any cohabiting arrangement is envisaged is to instruct a solicitor to draw up the terms agreed.

"If this is not possible, the parties should at the least put their understanding in writing."

Problems often arise where one party to an arrangement is registered as the sole owner of the property even though both parties have contributed to the cost. Aside from exceptional circumstances, such as where the co-owner is living in the property, or where specific protection has been registered, the home can be sold by the legal owner without the consent of the other party.

In such cases, the aggrieved party's only option is to pursue an action in the courts for a share of the proceeds, arguing that the legal owner holds the proceeds on trust for both. However, such proceedings can be both expensive and time-consuming.

Difficulties can also arise where a property has two legal owners and only one wishes to sell. Often in such cases, one party agrees to buy out the other's interest and to assume responsibility for any mortgage payments. In such cases it is important to ensure at that stage that legal ownership of the property is transferred to the party assuming liability for the mortgage.

Likewise, a party transferring legal ownership should, unless something to the contrary has been agreed, ensure that responsibility for any joint mortgage is also transferred.

If a co-owner refuses to agree to the sale of the property, the only option open to the person trying to sell is to apply to the court under section 30 of the Law of Property Act 1925. This states that, if one owner refuses to agree to a sale, "any person interested may apply to the court for a vesting order or other order for giving effect to the proposed transaction".

Whether the parties are able to reach an amicable agreement or are compelled to go to court, valuing each party's shares is often the greatest difficulty. Richard Vause, an associate partner with the London surveyors Edgerley Simpson & Partners, advises: "Anyone transferring their interest in a property should obtain a professional property valuation and a structural survey.

"If the relationship between the parties is good and the property is in sound condition, the informal opinion of a number of estate agents should suffice.

"It is, however, important to ensure that the actual realistic selling price is obtained rather than a suggested asking price. The difference between the two could be substantial."

Mr Vause adds that if the parties cannot agree a valuation informally, each should appoint a professional valuer.

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