What happens to jointly owned property when a relationship ends?

Dealing with jointly owned property after a separation can be very difficult, particularly if the parties are not on good terms. That is when it becomes so important to ensure that you know your rights and that you obtain practical and helpful legal advice, to assist you with navigating this difficult time. 

Deciding what to do with the former family or couple’s home together can be complicated. One co-owner may feel emotionally attached to the property but is unable to afford to buy out the other co-owner, or maybe agreement cannot be reached as to the amount to be paid for the co-owner’s share. 

In such cases, it may be difficult to achieve a fair and speedy resolution and lead to disputes, particularly where one co-owner requires their share of the equity to find alternative housing and move on with their life. It may also be that where one co-owner moves out and the other co-owner continues to live in the house, there is a dispute as to who should pay the mortgage and other household expenses.

In certain circumstances, a co-owner can force the sale of jointly owned property, however the process can be complex, depending on the type of ownership and the nature of the dispute. 

Whether the property is owned as joint tenants or tenants in common will affect the rights of co-owners and the options available to force a sale.

It is important to note that whilst the Limitation Act 1980 does not apply to TOLATA claims, you should still act without delay, if you are in a dispute about whether a property should be sold.

Categories of property ownership

Property ownership typically falls into two categories:

Joint Tenancy: Under a joint tenancy, all of the co-owners have equal rights to the whole of the property. If one of the co-owners dies, their share automatically passes to the other co-owners under the principle of "survivorship."

Tenancy in Common: If there is a a tenancy in common, each co-owner holds a separate and distinct share in the property, which may or may not be equal. For example, the property could be held in shares of 50:50, 70:30, or any other percentage agreed at the time of purchase. When one co-owner dies, their share does not pass automatically to the surviving co-owners but instead forms part of their estate, passing according to their will or the laws of intestacy.

Resolving disputes about property ownership

For co-owners who cannot agree on whether to sell a property, the primary legal route for forcing a sale is through an application to the court under Section 14 of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA). TOLATA claims are generally a last resort, when the owners of a property are in a dispute about whether it should be sold. 

TOLATA claims can be brought where the property is held by the owners as tenants in common. If the property is held as joint tenants, the owner who wants to sell the property would need to two things. Firstly, they need to serve a notice on their co-owner to sever the joint tenancy. Secondly, they need to apply to the Land Registry to register a restriction on the title so that their co-owner cannot sell the property without them knowing about it. 

When making a TOTALA claim, the party seeking the sale must show that it is in the interests of all of the parties involved to sell the property. The court has broad discretion to determine what is fair, and will take various factors into consideration. 

The court can order the property to be marketed at a certain price, and specify the estate agents who will deal with the sale, if this cannot be agreed between the parties. 

If the court orders the sale, it may also determine how the proceeds will be divided, which can be particularly important in cases of unequal contributions to the purchase price or maintenance of the property.

In some cases, co-owners may have entered into a written agreement, often called a “declaration of trust”, at the time of purchase, specifying the co-owner’s ownership shares or financial contributions and including provision for payment of any mortgage or the property’s outgoings and selling the property in the future. If the terms allow for a sale, the co-owner wishing to enforce this provision may do so without needing to go to court. However, if the other co-owner disputes the terms or refuses to sell, it may still be necessary to seek court intervention to ensure the sale is carried out.

How the court decides whether to order a property sale

When determining whether to order the sale of jointly owned property, the court will consider several factors, including:

• The nature and extent of ownership
• The intention of the person(s) who created the trust
• The purpose of the property i.e. what it is used for
• The needs and circumstances of each of the the co-owners
• The welfare of any minor who occupies the property, or who might reasonably be expected to occupy the property as their home
• The interests of any secured creditor.

Each of the parties would be able to make representations to the court in relation to each of these factors, explaining why they think the property should either be sold, or not sold.

Legal advice to force the sale of property

Forcing the sale of jointly owned property can be initiated under certain circumstances, such as when co-owners are unable to agree on whether to sell the property and/or how to divide its proceeds. 

While the process can be complex and emotionally charged, at Samuels we have a fantastic track record of resolving disputes amicably through negotiation or mediation and ensuring that the ownership and sale of a property is dealt with fairly, without the need to make an application to the court. Where this cannot be achieved through negotiation, we have a wealth of experience in helping clients make and defend TOLATA claims.

If you want to sell a property that you co own, or if someone is trying to force you to sell a property against your will, we can help. Contact us today to speak to one of our expert lawyers.