Hi,

I have a legal charge on my ex-wife's house expressed as a proportion of the original purchase price. The legal charge was at her request when capital settlement was decided. Now 6 years on, she wants to discharge the legal charge. The problem is, she has since extended the property and we cant agree on the market value of the un-extended house.

The legal charge states that my proportion should be on the open market value of the house at the "repayment date".

I maintain that the fairest way to establish the market value (open market value now doesnt exist) is to compare the un-extended property with comparable properties.

My ex wife maintains that it should be the valuation of the extended property less cost of building the extension.

Who's right ? Thanks for any opinions

I'm confused as to the situation - However, the MV is the value of the property as it physically stands with the extension based on comparable sales evidence.

Therefore to find out what it would be worth without the extension you would need to find comparables sales evidence of similar houses without extensions.

If such comparable evidence cannot be found then you would have to guesstimate the added value to the property by having the benefit of the extension. This is likely to be more than the cost of build but not necessarily and will be largely determined by the locality and what the trend is for that locality.

My answer probably makes no more sense to you then your question did to me...so we'll call it quits.

Simply get professional advice from a surveyor/valuer.

Thanks for your replies.

the legal charge says that the value of the unextended house should be determined by a qualified valuer. My ex does now want to move down that route (whereas before she wanted to take the alleged high building costs off the market value of the extended house as being the value - there's a surprise !)

As we have to instruct the valuer jointly, I've asked her solicitor to go ahead and draw up the instructions and I will review and add my own instructions - this sould be interesting. I can see the agreement of the instructions being a lengthy process !

james

It's clear that the cost of the extention will add value to the property over and above the actual cost of the work, in your position it would make sense to agree to her request.

for example: Value of property without ext. £250,000
Value with extention £300,000
Cost of extention £30,000
New Value (less costs) £270,000
making an assumption of your %age at 20%

20% of £250K = £50K 20% of £270K = £54K

in this scenario you cant lose

Bill

You'd think so wouldnt you. but when she bases the cost of the extension as £102,000 !!!! the maths dont stack up.

Funny, most people that I've spoken to, like you estimate a side extension in the region of £30k ... not my ex