Co-ownership disputes

Co-ownership disputes generally break down into 3 types :-

• where there is a dispute about beneficial entitlement whether the property is legally owned as co-owners or only 1 person is the registered legal owner.

• where 1 co-owner wants to sell but the other doesn't.

• where 1 of the owners stops contributing to the mortgage or other outgoings.

Many properties are bought by unmarried couples in long term relationships. Sometimes both are the legal owners, both have contributed 50% towards the deposit and both are on the mortgage. In other cases, for whatever reason, there is only 1 legal owner but both contribute towards the mortgage or other bills.

Co-ownership disputes can also arise with family owned properties which may have been part of an estate when a relative dies.

Read on to find out what happens if the relationship fails or  joint owners get into a dispute, such as where 1 wants to sell the property but the other doesn’t?

One co-owner wants to sell and the other refuses

Where co-owners disagree about selling a property, the law does not permit a permanent deadlock. Under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA), a co-owner can apply to the court for an Order for Sale.

The court has discretion and will consider factors such as the parties’ original intentions, the purpose of the property (for example, as a family home), the welfare of any minor children, and the interests of secured lenders. While there is no automatic presumption of sale, the court will often order one where the original purpose has come to an end, particularly following separation or the breakdown of a joint investment.

If the property is held as tenants in common under a Declaration of Trust specifying unequal shares, the court will usually treat that document as conclusive and divide the net sale proceeds accordingly. Where the Declaration expressly allows a majority equity holder to compel a sale, the court will generally enforce that provision, provided any notice and procedural requirements have been properly followed.

Disputes commonly focus on the interpretation or validity of the Declaration, compliance with its terms, and financial accounting between the parties. Early legal advice can often secure a negotiated resolution and avoid the cost of contested proceedings.

Claims available if you are not the legal co-owner

If you are not the legal owner of a property but have been living in the property with your partner you may be able to claim a beneficial interest in the property on the basis that you paid towards the deposit for the property i.e made a direct financial contribution.

Even if you have not paid any money directly for the purchase of the property, you can assert a financial interest on the basis that there was a common intent with the legal owner that you would have a beneficial interest in the property.

This is also usually evidenced by ongoing financial or other contributions to the property. The most obvious examples will be financial contributions towards mortgage payments or any work carried out to the property but even if you have not been making payments towards the mortgage or obvious direct improvements or repairs for the property, you may instead prove that you have contributed towards food and utilities. In this scenario, your evidence of the crucial common intention of co-ownership will need to be stronger.

What about non-financial contributions?

The most obvious example here is where an unmarried couple have children. Only 1 of them is the legal owner of the property. The other party does not contribute financially towards the property or contributes less because she or he looks after young children. In that situation, a claim can still be made to have a beneficial interest in the property.

Solicitors for disputes between property joint owners

Property co-ownership disputes are complex. As with all legal disputes but especially these types of disputes it is important to see if mediation can avoid a costly and risky court dispute.

Our specialist property dispute solicitors have a lot of experience in advising in this area so please do get in contact to discuss your situation and how we can help.