Owning joint property can be a great way to climb the property ladder. However, in some situations, you or one of the other parties may wish to sell it when the other owners do not.
It’s not uncommon for owners to have differing views on how to manage and when to sell a co-owned property. If parties cannot agree to sell, various legal issues arise. If you’re involved in this type of dispute, it’s vital you know how to manage it and your legal options.
Below, we explain who can force a sale, the laws and procedures, and the associated costs. For more information and guidance, contact Helix Law today. Our specialist property litigation solicitors are experienced in forcing the sale of jointly owned properties where there is a dispute over whether or not to sell or over who should receive what out of the proceeds of the sale.
Who Can Legally Force the Sale of a Jointly Owned Property?
Under English law, there are two main types of co-ownership:
- Tenants in common; or
- Joint tenants.
The primary distinction is what happens to a co-owner’s share upon their death. For a tenant in common, it will pass according to the terms of their Will or under intestacy laws. For a joint tenant, their share automatically passes to the surviving owners.
Any co-owner, whether a tenant in common or joint tenant, may apply to the court to force a sale, although a judge ultimately decides whether to allow this.
Typical situations include one-half of a separated cohabiting couple wanting to release their equity while their ex-partner refuses to sell. A person who jointly inherits property may also disagree with the other beneficiaries about distributing it between them.
How to Apply for a Court Order to Force the Sale of a Property
You should speak to a solicitor before proceeding with your claim, as they can guide you on the likelihood of success and help you avoid wasting time and money if you take the wrong approach. Issuing a claim incorrectly can lead to wasted costs, but broadly, if you need to issue a claim, the next steps will include the following:
- Drafting the Claim Form correctly and with detailed particulars of the claim sets out your rights, what you seek, and why. Two different approaches can be taken, either Claim Form N208 or Claim Form N1. You must provide your details, the other parties’ details, and a detailed summary of the issues (known as the Particulars of Claim). These are especially important documents that not only set out the facts and law but seek to subtly persuade. If you later need to change or amend your claim or Particulars, the starting point is that you will need the court’s permission (which may not be granted). Usually, where permission is given, it will be only on the basis that you also pay the costs of and occasioned by your amendment- such as the cost of the other side having to re-draft their Defence. Getting this right is incredibly important.
- Gather the necessary evidence to support your position, including documents and correspondence. If you complete Claim Form N208, then you must also provide a witness statement.
- Issue the claim. Depending on the case’s value and complexity, you can send your documents to your nearest County Court or the High Court.
- Pay the court fee.
The court will issue your claim, serve copies to the other parties, and list a first hearing to set directions and a timetable for the case’s management.
How Courts Determine the Need to Force a Property Sale
There are three statutes a joint owner can rely on:
- The Matrimonial Causes Act 1973
- The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA)
- The Married Women’s Property Act 1882
The first two are the most common, with the 1973 Act relating to divorce proceedings and the 1996 Act pertaining to unmarried co-owners. Helix Law don’t deal with family disputes and divorce and so we cannot help where there is a property dispute in the context of a divorce.
Where a dispute relates to matrimonial proceedings, a judge will consider the welfare of any children, each party’s financial needs and resources, and how long they were married.
When considering an application under TOLATA, the court first examines the legal title. The starting point is that each party’s interest follows what the title documents say. Therefore, if the official register states that you co-own a house, the initial presumption is that you own an equal share.
However, the register may not name you as a legal owner, or you may wish to show you’re entitled to a greater share due to your contributions or discussions with your joint owners. In this situation, the judge will consider whether any of the following exist:
- An express declaration, which parties record in writing to confirm what proportion of the property they each own. The document is called a “Declaration of Trust” and is helpful in situations where parties contribute unequally to the purchase price.
- A constructive trust arises when parties agree they should hold the property in a specific manner without executing a Declaration of Trust. The claimant must show they relied on this understanding and suffered detriment as a result. The court will consider any other written agreements and the parties’ conduct when assessing whether there is a constructive trust.
- A resulting trust arises through contributions. Most commonly, contributions are financial, such as if one party paid the entire deposit. Depending on the case’s facts, the court may also consider other payments made towards the household.
The party that is the majority owner is more likely to succeed in forcing a sale or defending a claim. However, the court will also look at each party’s intentions when buying, why they purchased it (e.g. for a family home or business premises), any children who live there, and the interests of any creditors to whom the parties owe money.
If you own a share of a property but the land register entry does not reflect this, you are at greater and higher risk of dissipation of your asset. Put simply, your share of the property might be sold, and you might not receive notice of the sale. This type of risk can lead to the need for an injunction application to protect your position.
Do Courts Always Grant Orders to Force the Sale of a Property?
There are no guarantees in litigation, and the judge will strive to achieve a fair outcome based on the facts and relevant law, so a robust claim is vital to maximise your chances of succeeding. Usually, we are able to force the sale of a jointly owned property, not least because otherwise, you will deprived of your interest (financial value) in the share of the property itself.
What Are the 5 Court Orders Possible to Force a Sale?
Refuse Sale
A judge may refuse the claim for various reasons, such as insufficient equity in the property or if selling would unfairly disadvantage one party.
Refuse Sale but Regulate the Right to Occupy
The court can refuse the claim but make an order regulating how the parties use the premises. For example, if it is practical for one party to move out, the person living there must pay the rent.
Order for Sale
An order for sale is usually granted where there is enough equity, and the judge considers it fair to do so. The order details how the parties will market and sell the property.
Delayed Order for Sale
The judge may grant the order but delay selling to a later date, such as once the resident children reach 18.
Partition Order
This order is only made in exceptional circumstances and involves dividing different areas of the property so each party owns a distinct part.
Who Pays the Legal Fees in Forced Property Sale?
The person making the claim usually pays the court fee but can ask the court to share this cost. Each party tends to pay their own legal fees, but the court can order an obstructive or unreasonable party to meet the additional costs incurred by the other person due to their poor conduct.
Costs are always ordered at the discretion of the court. One of the primary aims of our instruction is to position you to be seen to have acted reasonably and proportionately in terms of the legal costs you incur and those you seek to recover. We are typically able to recover c.65-70% of your costs, and often up to 95%.
The successful party may also claim their reasonable costs from the unsuccessful party. In terms of conveyancing fees, parties usually split these equally.
Need Advice? Contact Helix Law.
Resolving disputes over jointly owned property is a complex legal process. We have a specialist property litigation team acting nationally in these types of disputes. If you find yourself in a situation where you need to force the sale of a property you own, seeking expert legal advice is crucial to understanding your rights and options.
For further guidance and to explore your options, contact Helix Law’s team of expert property litigation today. We have specialised knowledge and experience and can provide tailored advice to best protect and improve your position.