Co-ownership and Cohabitation Disputes

The first is where after the breakdown of the relationship between unmarried partners – and one party wishes to sell the property, and the wish of the other party is to retain a house or flat.

In this situation, one party can apply to Court for an Order for the sale of the subject property. This is under section 14 of the Trusts of Land and Appointment of Trustees Act 1996.

The Court has a wide discretion whether or not to order a sale of the property and if so upon what terms.

Under section 15 of that Act, the Court is directed to take the following circumstances into account when exercising this discretion; –

(a) the intentions of the person or persons (if any) who created the trust,

(b) the purposes for which the property subject to the trust is held,

(c) the welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home, and

(d) the interests of any secured creditor of any beneficiary.

It is quite normal for the party wishing to remain in the property to buy out the interest of the other party at an agreed price.  However, this is not always an affordable option to the party wishing to remain. In such a case, other options may be considered.

In this situation, we will use our best efforts to resolve the matter amicably upon reasonable and sensible terms for our client-including through the use of pre-action mediation- in an effort to avoid costly and time-consuming legal proceedings.  We can provide initial advice through the use of a fixed fee meeting or telephone conference. There will be no charge for initial telephone calls.

There are secondary arguments as to what interest each party may have in the subject property. This is especially the case when there is no detailed declaration of trust and where one party has paid the deposit and/or the mortgage installments or where the property has materially increased in value. In a perfect world, there should be a detailed declaration of trust in every case, but in reality, this happens only relatively rarely.

We have in the past brought an action in professional negligence against a conveyancing solicitor who failed to advise his co-ownership clients to prepare a detailed declaration of trust providing for such a situation.

Equitable accounting:

This is when one party claims an enhanced share of the property including the following examples:

1. When they have laid out money to improve the property such as to build an extension
2. When one party has charged the property to raise money for their purposes such as their own business or to buy a buy to let property acquired in their name
3. Where one party has left the property, and the other party continues to pay mortgage instalments
4. Where one party pays off a debt secured upon the property by way of a charging order.

The rules on equitable accounting can be fairly complex.