Q&As

A property is owned on the basis of 50:50 beneficial ownership. The party now excluded from the property has paid 100% of the mortgage payments. The other party is occupying the property with three minor children and pays some of the bills (for example, council tax, etc). Both parties wish the property to be sold. Aside from mortgage payments and renovations that have directly increased the value of the property, what else (if anything) can be offset against a claim for an occupation rent?

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Produced in partnership with Paul Infield of The 36 Group
Published on LexisPSL on 12/12/2019

The following Family Q&A Produced in partnership with Paul Infield of The 36 Group provides comprehensive and up to date legal information covering:

  • A property is owned on the basis of 50:50 beneficial ownership. The party now excluded from the property has paid 100% of the mortgage payments. The other party is occupying the property with three minor children and pays some of the bills (for example, council tax, etc). Both parties wish the property to be sold. Aside from mortgage payments and renovations that have directly increased the value of the property, what else (if anything) can be offset against a claim for an occupation rent?

This question is about the issue of what expenditure or work can be offset against a claim for occupation rent.

When cohabitants separate and one remains in a property in which it is agreed or determined that the other has a beneficial interest, there may have to be an account taken of occupation rent. Following Stack v Dowden it is clear that the statutory principles contained in the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) must be applied. In simple terms, these enable the court to order the beneficial owner in occupation to pay compensation to a beneficial owner who is out of occupation. The court must have regard to the following factors when making such an order:

  1. the intentions of the person(s) who created the trust

  2. the purpose for which the property subject to the trust is held

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