Falling out with a co-owner: a real estate mistake – Immobilier et Construction
Australia: Falling out with a co-owner: a real estate error
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We all make mistakes in life. Sometimes we make it big – we buy a property with someone we shouldn’t have and find ourselves stuck holding part of a piece of land as a co-owner with someone we don’t talk to anymore and who don’t pay the mortgage.
This scenario can of course occur frequently in family court proceedings and Lynn and Brown’s family law team deals with the issue on a daily basis. We also see the problem commonly on the civil side of the law in the commercial and dispute resolution team. More often than not, land was purchased collectively among friends or family members and these relationships then turned sour. One side wants to sell the land, another wants to hold it. A third is missing and hasn’t been seen or heard from for years.
No one likes to consider that friendships and relationships can break down and so there is almost never a pre-purchase agreement that outlines the nature of the investment or the procedure for dealing with a disagreement. when it occurs.
While a well-constructed contract is the best way to sort things out, fortunately there are options even in the absence of a written agreement. Section 126 of the Property Law provides co-owners with the ability to force the sale or partition (i.e. a kind of “division”) of co-owned land by going to court Supreme of Western Australia.
If a joint owner, or a group of joint owners, holds 50% or more of the legal title to a property, that owner (or owners) may apply to the Supreme Court for an order selling or dividing the land into the shares held by each part. The court is bound to grant the sell order unless it “sees a good reason to the contrary”.
If you are a co-owner (or co-owners) with less than 50% title, you still have options available, however, the court does not have the same obligation to force the sale. The court orders a sale when, due to the nature of the land, the number of interested parties or any other circumstance, the sale of the land would be advantageous for the interested parties.
When a sell order is placed, owners who oppose the sale may elect to buy the share of the party seeking to force the sale. If the other owners are unwilling to buy, then the court has broad powers to make orders as to how the sale of the land will proceed. These orders may include instructions on which party controls the sale, required appraisals, a minimum price for the sale, or the appointment of real estate agents and auctioneers.
It is important to obtain these additional orders as part of a Section 126 application, as it is one thing for a party to successfully apply for the sale of land, but it is other for sale price, method of marketing and selling and acceptance of offers to be agreed upon or determined by the court.
We have a lot of experience in this field, so we know what to expect. We use this knowledge to prepare your case and avoid unexpected problems arising during litigation. Having a clear plan for the sale, either by documented agreement or court order, is essential to ensure the sale goes smoothly.
If you are looking to buy a property with a friend or family member, please contact us for legal advice. Preparing a proper co-ownership agreement can save a lot of stress, time, and money in case something goes wrong between landlords. It can also avoid issues that may arise between co-owners during their ownership of the property, including but not limited to maintenance costs, utility costs, and use of the property. If you are the co-owner of a property stuck in a situation where your co-owners have different needs than yours, we can help you negotiate a smooth and amicable transition or seek orders of sale from the Supreme Court .
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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