Jersey's Royal Court has ruled that a house owned by man with significant debts can now be sold for less than £2million, despite it being originally valued for double that sum in 2011.
Alan Booth was ordered to sell his two properties by the Court in 2015 in order to pay off some of his debts.
Despite objections by Mr Booth, who was a Fellow of the Royal Institution of Chartered Surveyors, his first property ‘Beaumont Hill House’ was sold for £800,000. But the sale price of his second property had to go before the Court, as the Viscount felt Mr Booth’s objection to the proposed sale price risked losing an offer he wanted to accept.
Commissioner Sir Michael Birt, along with Jurats Geoffrey Grime and Pam Pitman, heard that at the time Investec Bank granted a £2.8million loan to Mr Booth in 2011, his second property ‘Kings Oak’ in St. Peter was valued at £4million by a surveyor.
By late 2017 his debt to the bank had allegedly increased to approximately £3.4million due to accrued interest, a figure Mr Booth disputes.
Surveyors valued ‘Kings Oak’ at £2.4million in March 2016. Two estate agents suggested marketing the property between £2.85million and £3million, and the Viscount instructed them to put it for sale at £2.95million in April 2016.
An offer of £2.3million was withdrawn and an offer of £1.6million was rejected in the following months.
Then in November 2016, Investec requested another estate agent to also market the property. They considered the asking price of £2.95million was on the “high side” so it was reduced to £2.3million, where it has remained since April 2017.
An offer of £1.8million was rejected in August 2017, but a potential buyer increased an offer to £1.85million, which the estate agent said, “…is probably the best offer that the Viscount is likely to receive and advise that it should be accepted” due to the unusual design of the house as a three generation property.
Mr Booth told the Court that, “…given the valuation of £4m obtained in 2011, it was inconceivable that the property was now worth only £1.85m. The property had been well looked after by him and his wife, who were still living there. It had substantial grounds and was well built. He considered that there was also scope for obtaining permission for development including the creation of further units of accommodation. The property would therefore be of interest to a developer.
The written judgement of the Court added: “...He considered that the reliance by the Viscount on the advice of estate agents was misplaced. They were not professionally qualified and were only interested in obtaining a fee upon a sale. He was a Fellow of the Royal Institution of Chartered Surveyors with 49 years of experience in the building trade. He was of the opinion that the Property would not deteriorate over the winter months and considered the Viscount was being over hasty in seeking to sell at this stage.”
In a recently published decision, the Royal Court commented: “…In our judgment, the Viscount is acting reasonably in wishing to accept the offer of £1.85m for the property. (...) After marketing for such a period by three estate agents, we agree that there are reasonable grounds for believing that this is the best price which can be achieved at present.
“…Mr Booth is concerned that the Property is being substantially undersold by reference to the 2011 valuation of £4m. However, the history of the matter since then strongly suggests that that valuation was simply incorrect."
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