Forcing the Sale of a Jointly Owned property
Selling a co-owned property or land can be stressful, especially when the other legal owner (s) doesn’t want to sell the house. When this is the case, the legal owner intending to sell the property can make an application to a court for an order for sale. Upon the granting of the order for sale by the court, the legal owner can force for the sale of the jointly owned property.
However, the legal proceedings to obtain the order for sale can be quite expensive, which is why most joint owners firstly seek mediation with family law before making applications to courts. Joint owners may also have their intentions documented within a Deed of Trust. Here are more guidelines on what goes into forcing a sale of a jointly owned land or property.Get an Instant Quote >>
Difference between ‘Tenants In Common’ and ‘Joint Tenants’
There are several ways that multiple people can own a property together. The first step in assessing whether you will be able to force the sale of a jointly owned property, will be to assess whether you are ‘tenants in common’ or ‘joint tenants’
Tenants in Common
A Tenancy in Common is an arrangement made between 2 or more people that share ownership of a property. Each individual can control an equal or different percentage of the property. This can lead to a situation wherein which Tenant A owns 60% of the property and Tenant B owns 40% of the property.
The status of the property can be checked by paying a £3 fee to the land registry. If on the title deeds you see the phrase:
“No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court”
As well as the names of the owners, this confirms a tenancy in common.
If one or multiple tenants change their intentions and want to dissolve the tenancy by selling the property, they must come to a joint agreement. If all goes smoothly this can either be done by selling their shares to another of the tenants, or selling the property and taking their share.
However if one party does not agree to an understanding, the case can be taken to court for partition actions. The court will then divide the property between the tenants in common.
At first, a Joint Tenancy can seem very similar to a Tenancy in Common. There is a slight difference however. The term is used when a property is jointly owned by two or more people. There are equal share of the equity and obligations in regards to the property. A joint tenancy commonly occurs in real estate whereas tenancy in common might apply to commercial property as well.
When one or more parties within the joint tenancy want to sell the property, it can get more complicated. The first stage is to change the status from Joint Tenancy to Tenants In Common. This can be done by applying for a ‘notice of severance.’ You must inform the Land Registry of this change so the title deeds can be adjusted.
So long as all tenants agree to the sale of the property, this can be done fairly simply. However if complications arise and any individual disapproves the sale, this is where a solicitor may be required.
Matters Relevant in Determining Applications for Sale of a Jointly Owned Property
According to the UK’s Trusts of Land and Appointment of Trustees Act 1996, Section 15, courts must regard certain matters when determining an application for an order of sale. These matters include the following;
- The interests of any beneficiary’s secured creditor.
- The intentions of the persons or person who created the trust, if any.
- The purpose or objective for which the property or land subject to the trust is held.
- The welfare of a minor who is reasonably expected to occupy or already occupies land or a property subject to the trust as their home.
Proving the Original Intentions of Legal Owners
As far as the intentions of the person that initiated the trust are concerned, the courts will consider whether these intentions are consistently the same from the time of agreement to the time when an order for sale is requested. This is because intentions change with circumstances, an individual’s actions, or when joint owners get into a mutual agreement. But how can a court prove the initial intention of legal owners?
In most cases, co-owners of a property will set out within a Deed of Trust their intentions of buying a property. In addition to capturing the legal owners’ intentions, the Deed of Trust highlights their form of relationship and how they intend to have their co-ownership terminated, should their relationship status change. Here are some of the common intentions that come with joint ownership of a property.
This is where joint owners buy a property or land with the purpose of making a financial gain after a span of time. Co-owners expect a return on investment without an intention to live in this property. They will, therefore, bring in tenants in exchange for money.
This is where a couple purchases a property as the primary residence in which they will have and raise their children in. The intention, therefore, is to live in this property for a defined period of time, as long as the couple is still raising and nurturing their children. This intention changes when the children move out of this property.
A couple will purchase a property to be their residential home as long as they are married. They intend to live in this home and benefit from it while they remain married. Issues such as divorce may change this intention.
In cases where a young couple purchases a property with a view to have separate ownership and resell it in the future, their intention is to own it for a short period of time. The intention may also be to make the property their marital home in months or years to come.
Outcomes of an Order for Sale
Any application to a court for an order for sale may be awarded either of the following orders;
- Order a sale
- Order a sale but delay the request for a specified duration
- Refuse a sale
- Refuse a sale with restrictions on the right to occupy the property.
- For exceptional cases, order a partitioning of the co-owned property.
Order a Sale
An order for sale is awarded when;
- There are numerous joint owners, and a majority of them approve the sale.
It is important to note that other relevant matters that the court considers in determining an order for sale are the wishes and circumstances of other beneficiaries if there are any. The beneficiaries must be entitled to the right of possession of the property subject to the Deed of Trust.
Failure in the purpose for which the property was bought.
For instance, when a couple that purchased a matrimonial home divorce or break up before having any child. The purpose of the property was to serve the couple as their matrimonial home. Divorce or break up, therefore, renders this intent as a failed purpose.
The property was purchased for the purpose of investment.
When the property in question has been purchased for financial gain, then a legal owner may be entitled to make a sale as far as their partnership agreement allows.
Order a Sale but Delay the Order for a Specified Duration
Courts may award a joint owner with an order for sale but suspend the sale for a specified duration. This is to allow the joint owner wishing to reserve the property the chance to purchase the beneficial interest of the other co-owner. The cost of buying the beneficial interest of the leaving co-owner is arrived at following a proportionate calculation of the property’s fair value.
Refuse a Sale
Courts will analyse all the elements outlined in the 15th Section of the Trusts of Land and Appointment of Trustees Act 1996 to determine an order for sale application. If an application does not meet the requirements as per these elements, then the court may reject or refuse sale of the property. For example, if the purpose of a property was to be a matrimonial property where a husband and wife will live as far as they are married, then the court will consider this when making a judgment on an application. Therefore, if one of the co-owners files for an application of an order of sale, the court will refuse the sale as the intention of buying the property was for matrimonial purposes. The original intention holds as long as the two remain married.
Where a property has been jointly bought under an agreement that one co-owner cannot sell the property without the consent of the others, then this may be the basis of refusal of sale of the property.
Refuse a Sale with Restrictions on the Right to Occupy the Property
As earlier stated, the courts may refuse the sale of property following certain guidelines. However, in some cases, the court may reject a sale and award restrictions on the occupancy rights to the property. What this means is that when one co-owner leaves the property, then the remaining legal co-owner may be required to pay the leaving party some rent. This form of an order occurs when;
- It is unfair for the leaving party to be excluded from the privileges and benefits that come with occupying a property as are being enjoyed by the remaining co-owner.
- It is considered to be socially unacceptable to order the sale of a property under certain circumstances.
For instance, when one joint owner applies for an order of sale of a property that was originally purchased as a family home, the court may refuse the sale but with restrictions. This regulation will require the remaining spouse to pay rent to the leaving spouse throughout their duration of occupying that property. The rent is calculated as a proportion of what may be considered to be the ‘fair rent’ of that home.
Partitioning the Co-owned Property
Partitioning a jointly owned property implies a physical division of the property as per the request of the petitioner. Where a property is too small to be physically divided, the court may order for a sale of the property. The property may be sold at a private sale or an auction. The proceeds of this sale are then divided proportionately as per their ownership interest. It is, however, essential to note that this type of order is unique, and it is rewarded to exceptional cases. If you are interested in filing for a partition application, you should consider consulting professional solicitors. They can provide guidance on all the legal matters involved in the process.
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Frequently Asked Questions About Forcing the Sale of a Jointly Owned Property
Can an ex-spouse force the sale of my property?
Yes. Your ex-wife or husband can force sell your property. They can do this by applying for an order of sale of your property in the courts. If the courts validate the application based on the elements outlined under section 15 of the Trusts of Land and Appointment of Trustees Act 1996, then your property can be sold by your ex-spouse.
What is the cost of forcing the sale of a jointly owned property?
The cost of forcing the sale of a co-owned property varies from one solicitor to the other. However, the total cost of applying for an order for sale is a summation of the court fee and the solicitor’s fee. You can consult your solicitor for guidance on the expected costs.
Under what circumstances can you force a sale of property?
There are several circumstances that can see the courts validate a forced sale of a property. Some of these circumstances include;
- An agreement within the Deed of Trust outlining the intentions of buying and selling a property.
- A divorced or separated couple who had purchased a property with an intention of having it as their matrimonial home.
- A man and woman who are not yet married but had purchased a property. Their intention is to resell it after mortgage clearance or after a specified duration of time.
- When children move out of a property that was intended to be a family home.
What is the role of a solicitor in an order for sale case?
Hiring a specialist solicitor to assist you in applying for an order for sale is essential. Their vast experience and knowledge of the UK land laws will help you with the following;
- Making a court application for an order of sale of a property on your behalf.
- Assistance in the mediation procedure with other joint owners.
- Drafting a Deed of Trust. An agreement on your intentions in a property and those of the other co-owners are outlined.
- Assisting in the calculation of the amount payable to the leaving party’s beneficial interest to a property.
- Any other legal proceeding revolving around an application for the sale of a jointly owned property. They will briefly you in all the legal proceedings involved in the sale of a jointly owned property.
Before going down the legal route, talk to all parties involved and try and come to an amicable agreement. It will save you a lot of time and money.Get an Instant Quote >>