Court Ordered Sale of Property held by Co-Owners – Section 66G of the Conveyancing Act
When property is held by co-owners, circumstances may arise where one of the owners wants to sell the property, and the remaining owner (or owners) do not.
Whether the property is held as tenants in common or joint tenants, a co-owner of property can apply to the Supreme Court for an order that Trustees be appointed to have the property sold. This is known as a section 66G application. 1.
The circumstances in which the Court will refuse to grant an order under section 66G are very limited, and it is clear that general hardship will not be enough to resist the order being made.
Although the parties may be co-owners of the property, this does not necessarily mean that they have been equally contributing to the property. Contributions to the property include payments such as:
- Mortgage repayments;
- Home Insurance payments;
- Council Rates;
- Rent (if a co-owner lives in the property at the exclusion of the other co-owner/s); and
- Improvements that add value to the land/property.
If one co-owner has made greater contributions to the property than the other co-owner/s, an accounting process may be necessary in order to ensure that when the sale of the property is ordered, each co-owner receives their fair share of the sale proceeds.
In a recent case of ours, we acted for the plaintiff in seeking an order under section 66G to be made for two properties to be sold. The parties had earlier undertaken a subdivision of the land and two lots remained, one of which had a house built upon it. The parties had a joint loan account to pay for the subdivision costs.
The defendant argued that due to his greater contributions to the properties, namely mortgage repayments, he should receive a larger share of the sale proceeds.
We were successful in showing that the defendant had improperly used funds from the loan account and that despite the mortgage repayments, the proceeds of sale should be equally shared.
The court ordered that the properties were to be sold, that the plaintiff’s costs of the proceedings be paid out of the proceeds of sale, and that the defendant pay his own costs. 3.
Although an application under section 66G is usually a straight forward process, issues of contribution need to be considered before any application is made or consented to.
If you are a co-owner of property and wish to have the property sold or another co-owner seeks to have the property sold, it is recommended that you seek legal advice in relation to your rights and liabilities.
If you would like further information regarding the sale of a jointly owned property, please contact our office to arrange an initial consultation.
1. Conveyancing Act 1919 (NSW), s 66G.
3. The usual order in a s 66G application is that the costs of both parties are to be paid out of the proceeds of sale.