Where there is co-ownership of real property the parties will hold the property as either:
Co-owners who are tenants in common own individually specified shares of the property. These shares can be equal or unequal. Shares are usually proportionate to each party’s initial contribution and are by agreement. The Certificate of Title for the property will record the shares owned by each tenant in common.
What happens where one co-owner wants to sell their share of the property but the other does not?
A co-owner may make an application to the Court for a trustee to be appointed to sell the property. The application will be brought under Section 38 of the Property Law Act 1974 in Queensland. Bringing an application will involve costs which will increase in the event that the application is opposed.
Owning property as a tenant in common protects your share in the agreed proportion. It is presumed that you are free to sell or transfer your share. You may also leave your share of the property in your Will in accordance with your wishes. If a tenant in common passes away, their share of the property passes per the instructions in their Will. For this reason, it is important to have a valid and enforceable Will if you own property as a tenant in common.
Co-owners who own property as joint tenants own the whole of the property equally.
Survivorship provisions apply to joint tenancies. If a joint tenant passes away, their ownership passes to the remaining joint tenant(s). Ownership will pass equally if there is more than one other joint tenant. This will happen automatically, without reference to the deceased’s Will.
Property is most usually held as a joint tenancy by spouses or de facto partners. Upon the passing of one partner, their interest in the property goes to the surviving partner.
What happens when one co-owner wants to sell their share of the property but the other does not? When only one co-owner of real property wishes to sell, disputes between the owners can arise.
As a first step, a co-owner should make genuine attempts to negotiate the sale with the other owner(s).
If negotiations are unsuccessful, a co-owner may apply for the Court to appoint a trustee to:
In Queensland, this application can be brought under Section 38 of the Property Law Act 1974.
The Court will consider:
The Court has the discretion to make the Order sought, refuse the Order, or make another Order. For example, the applicant may ask the Court to appoint a trustee to sell the property. At the hearing, another co-owner may argue that the property should be partitioned. The Court will hear from the relevant parties and make a determination as to:
If the Court appoints a trustee to sell the property, the property will vest with the trustee until sold. This means the trustee becomes the legal owner of the property and can deal with the property.
The proceeds of the sale will:
The Court may also appoint a trustee to partition the property. In this case, the property is divided into individual lots, with each party owning a different lot.
While a sale is the most common outcome, partitioning the property may be practical in some cases. For example, if the parties own farming land and live in separate dwellings on the property. In this case, the land could be partitioned into separate lots, with each party now owning one lot.
Regardless of the Order being sought, it is important to first get legal advice.
Any application should be thoroughly considered to avoid undue cost or delay. Our property litigation lawyers can help you to narrow the issues in dispute. This can ensure that once the Court makes an Order, the trustee can efficiently carry it out. Less time spent by the trustee will mean a greater pool of funds remaining for distribution.
We can also assist if an application involves other areas of law. For example, where:
No matter your circumstances, we can advise you on your options. Contact us to speak to a civil or commercial dispute resolution lawyer.
Before making an application to Court, it is advisable to attempt to resolve any dispute by:
Resolving the matter in this way will be less costly than bringing an application in Court.
The costs of a Court application can increase if the application is opposed. Determining the positions of the parties first can help to narrow the issues in dispute.
Negotiation or mediation may also give rise to alternative solutions. For example, one co-owner may agree to purchase the property from the owner who wishes to sell.
Aitken Whyte Lawyers have significant experience in alternative methods of dispute resolution. We can assist you to negotiate with the other party to clarify their position and the issues in dispute.
If the other party is unwilling to reasonably negotiate, we can send a final demand for the sale of the property. This demand can foreshadow an application under Section 38 of the Property Law Act. A letter from a lawyer threatening Court action can sometimes bring the parties to the table. If, however, a resolution is still not achieved, it will show the Court that you have made genuine attempts.
If the positions of the parties are close, we can assist you to undertake mediation to avoid Court action. We have experience assisting clients to successfully resolve disputes through mediation. We will ensure that your rights and interests are looked after in any resolution.
If you would like legal advice on your options to resolve a property dispute, contact us today.
When looking to purchase property with another person it is important to consider:
Property is often purchased with a close friend or family member. The nature of the relationship may result in the absence of a formal agreement. A simple partnership agreement, however, can clarify and resolve issues, should they arise. Having a written agreement in place can also assist in avoiding disputes.
A formal agreement should:
Aitken Whyte Lawyers are focused on results. Our property lawyers can assist you:
We will guide you through the process of applying to the Court, if necessary, to reach a resolution.
If you need practical legal help to resolve your property law dispute, contact us. Our experience and knowledge mean we can assist you effectively and efficiently.
Aitken Whyte Lawyers Brisbane
2/414 Upper Roma Street
Brisbane QLD 4000