Matrimonial Property Settlement

When a marriage or a de facto relationship breaks up there is usually a need to divide the assets between the two parties. The main asset in many relationships is of course the house (and any other real estate the couple may own). A valuation should always be obtained where one party is to remain in the property and purchase the interest of the other party.  A pre-sale valuation will also assist if the property is to be sold.

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There are two roles which the valuer may perform in a property settlement situation. The first is where the valuer is engaged jointly by the parties (usually paying 50% of the fee each) to establish a value at which the transaction should take place.

The second is where each party engages a valuer to value the property on their behalf, prior to negotiations taking place. If the two valuations are close then it will be easy for the parties to agree; perhaps by simply averaging the two valuations. Where the two valuations do not agree it is common for the two valuers to meet and to compare their valuations. This will involve first checking that the major value determinants are in agreement – such as the area of the house, land area etc. The main discussion however will be to compare the sales evidence upon which each valuation has been made. It is hoped that the valuers will then be able to reach an agreed value.

The above assumes that the two parties have agreed on the percentage of value which is to be attributed to each party. The split is of course nominally 50% each however other ratios may be agreed or enforced by a court. The valuer does not become involved in this side of the negotiation – the relative merits of each party’s claim regarding the percentage split are very complex and this is an area in where legal advice should be obtained.

If after going through the valuation process the parties still cannot agree the value of the property then the matter may need to be resolved in the Family Court. In court the judge will hear evidence from the valuers engaged by each party and will determine what the value should be. In past years it was common for the court to average the valuations or to establish a figure somewhere between the two based on the strength of each argument. In recent years however it is more common for the judge to hear from each valuer then decide which of the two valuations should be adopted. This process means that each party is at risk of an unfavourable outcome should the other party’s valuation be preferred, thus increasing the pressure on the parties to reach an agreed value prior to coming to court.