Case Study - TOLATA dispute

We acted on behalf of (‘L’). L co- owned a plot of land with (‘I’) and (‘R’) in equal shares. The land was made up of a mixture of both residential and commercial premises – the residential elements contained housing which tenants rented, and the commercial elements contained a farm which had some farming activity and some livestock. L and her husband had soley managed and maintained the land for several years with I and R taking little to no interest in the land, save for receiving rental income.

One of the parties had been suffering from some challenged to their health and they wanted to sell the land. The parties had an initial conversation about selling the land, the land was initially marketed with offers being received. However, a dispute arose very quickly in relation to the following:

• The sale price of the land

• The timeframe allowed for the sale

• Which agent should be used due to various conflict of interest claims

• Whether the land should be sold as a whole or divided into the residential/ commercial elements and selling them separately

• The terms of the overage to be agreed as part of the sale

• How various commercial machinery assets should be dealt with in light of the sale

Challenges

The challenges that needed to be addressed were:

• Acting and advising quickly so that L could balancing the benefit of potentially brining a claim to support the sale of the property on clear and defined terms against the costs of those proceedings and the inflexibility of any order being made by the Court– allowing L to consider what would be in her best interests.

• Ensuring L was able to achieve the maximum value for the land with minimal legal costs.

• Ensuring that L’s future interest could be secured using an overage.

Solutions

Advice was provided to L which balanced all of the competing interests and it was decided that in the first instance negotiating a settlement would be more beneficial than pursing court proceedings. The ultimate goal was to sell the land whilst ensuring a fair and reasonable price was obtained, the terms of the sale were agreed by all parties and the parties’ future interests were secured by way of an overage. The advice considered the costs and time frames of issuing and pursing proceedings.

We successfully negotiated a settlement which secured L’s future interest in the land, and set out clear terms on how the land should be sold. All parties were involved in the negotiations and the terms were recorded in a settlement agreement to provide additional protection if one party defaulted on the terms of the agreement.

Impact

Reaching such an agreement has had a positive impact on L’s life, in the first instance the sale proceeded on pre agreed terms which reduced the day-to-day correspondence and the number of decisions that had to be agreed by all parties which had previously caused so much tension. However, the impact is greater than that, the settlement meant that the strain on various family relationships was reduced allowing some reconciliation to happen.

The land was sold, the parties have received the sums due to them, and they have been able to move on with their lives – using their share of funds to pursue their own interests.