The joint mortgage trap: Owning a home with someone else can be a problem if one wants to move and the other has flown. Ian Hunter reports

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The Independent Online
LIZ RICHARDSON feels trapped. It is a problem shared by thousands of joint property owners who want to sell but cannot obtain the agreement of the other party.

Ms Richardson, a nurse, bought her flat in Streatham, south London, with a friend in July 1988. They took out a 100 per cent mortgage with the Nationwide Building Society for the pounds 62,950 purchase price.

'Shaun never lived in the flat, we bought it as an investment,' Ms Richardson said. 'The understanding was that we would keep it for a couple of years and then sell it. A friend moved in and the rent was offset against Shaun's contribution to the mortgage repayments. Shaun agreed to pay the excess.

'Gradually he stopped paying, or the cheques he gave me bounced. Eventually I tried to contact him. I found out that he had broken up with his girlfriend and no longer worked for the same employer.'

Her efforts to contact him have failed. She said: 'I continued to pay his share of the mortgage because I was frightened the flat would be repossessed.'

She now wants to sell the flat, but legally needs Shaun's consent before a sale can go ahead. If Shaun cannot be traced, according to Denzil Lush, a consultant and solicitor with Anstey Sargent & Probert, an Exeter law firm, Ms Richardson should apply to the court to approve a sale under section 30 of the Law of Property Act 1925. It 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'.

Mr Lush advises co-owners in disputes to avoid going to court if possible: 'Litigation is often time-consuming and expensive.' A legally binding agreement made before two or more people buy a property together can obviate legal action. It should set out the circumstances in which one co-owner has the right to sell and what happens if a party dies or becomes unemployed. It should also cover buy-outs, making clear who has priority.

Valuing each owner's share is often the greatest problem. Mr Lush advises that the agreement gives each party floating rather than fixed shares as each owner's contribution to the property can be taken into account until the time of the sale.

Andrew Scott, a partner with Lane Fox, a London firm of surveyors, said: 'The relationship between the two parties will very much determine the extent to which costly professional advice should be taken. Unless the relationship is close and amicable, I would consider it imprudent to transfer an interest without property valuation advice, a structural survey and, in the case of leasehold property, landlord's consent.'

If the relationship is amicable and the property in good repair, Mr Scott thinks an informal verbal opinion from four estate agents should be sufficient. 'Estate agents will normally give advice without charge. The best approach is to tell the agent the situation in order that the figure you are given represents his view of the actual selling price, as opposed to the asking price, which could be perhaps 10 per cent higher.'

If the co-owners' relationship has deteriorated, each party should appoint his or her own valuer. This route is more formal and also more expensive. Whatever the route, the buying party should ensure a full structural survey is carried out before the sale is completed. 'Any property may have developed serious structural defects. This could leave the buyer with a substantial financial burden, which should be taken into account when agreeing a purchase price,' Mr Scott said.

Denzil Lush is author of 'Co-habitation and Co-ownership Precedents', which is to be published next month.

(Photograph omitted)

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