Joint Property - Dispute

[_OkGo_]

Agreed the mortgage obviously has to be discharged first and in full but if the decision is made in court, apportioning the remainder by a 60:40 split does not make sense. But common sense and legal proceeding do not normally go hand in hand.

That would be true if Party A and Party B were married or a cohabiting couple.

I'm not disagreeing but I'm curious to know why their relationship would change this?

This does raise a bigger issue of how ownership and mortgages are treated legally. Party A is in the unfortunate position of having to pay the full mortgage because they cannot let it go into arrears or it will impact their future borrowing capacity. Party B can walk away from responsibility of the mortgage but retains 40% share in the property. Party B is using this leverage to strong arm Party A into agreeing a ridiculous settlement. It is an unfortunate situation to be in

 

[Sarenco]

Agreed the mortgage obviously has to be discharged first and in full but if the decision is made in court, apportioning the remainder by a 60:40 split does not make sense.

Well, if that's the ownership split the parties agreed upon in the deed, that's the apportionment I would expect the Court to apply.

I'm not disagreeing but I'm curious to know why their relationship would change this?

Basically because legislation gives the Court the authority to make property variation orders in the context of marital separations/divorces and (more recently) cohabiting couples.

It is an unfortunate situation to be in

Absolutely.

 

[_OkGo_]

So if Party A and B were living together and in a relationship prior to the purchase of the property, they could be deemed cohabitants and the courts could take a different view of the above circumstances? Their circumstances prior to separation will have a big bearing on any likely outcome

 

[User321]

Party A and Party B had a relationship but did not live together when the property was purchased. As they were unmarried, I would view it as 2 legally single individuals agreeing to purchase the property. However do comment further if there is an angle here.

A second opinion is great advice so that is taken on board!

 

[Sarenco]

So if Party A and B were living together and in a relationship prior to the purchase of the property, they could be deemed cohabitants and the courts could take a different view of the above circumstances?

Possibly, although I think it would be unlikely in this case.

The Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 provides for a broadly similar range of orders (including property adjustment orders) as are available to married couples when they separate or divorce.

The purpose of the Act is to provide protection for a financially dependent member of a couple if a long-term cohabiting relationship ends, either through death or separation.

I would view it as 2 legally single individuals agreeing to purchase the property

I would share that view.

As such, the Court doesn't have jurisdiction to make a property adjustment order and, in my opinion, would adjudicate solely on the co-ownership arrangement as reflected in the purchase deed.

I appreciate that may seem unfair but I don't think a court would look beyond what the parties actually agreed.

 

[User321]

Agreed! (RE the above)

The deeds are quite basic (like any deed I suppose) simply outlining the split (60/40) so how that split is applied is the big question

 

[Sarenco]

I came across a somewhat similar scenario a few years ago.

Two siblings bought an apartment together. Some years later, one sibling moved out to get married and the remaining sibling agreed to buy out the other.

The only snag was the apartment was in negative equity.

On the advice of their solicitor, the departing sibling ultimately agreed to make a payment equal to 50% of the estimated negative equity to the remaining sibling. Not a happy bunny!

 

[MOB]

As such, the Court doesn't have jurisdiction to make a property adjustment order and, in my opinion, would adjudicate solely on the co-ownership arrangement as reflected in the purchase deed.

I appreciate that may seem unfair but I don't think a court would look beyond what the parties actually agreed.

S.31 of the Land and Conveyancing Law Reform Act permits a court to make Accounting Adjustments, with broad discretion to achieve fairness between co-owners. Excuse formatting below

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(b) “accounting adjustments” include—
	(i) payment of an occupation rent by a co-owner who has enjoyed, or is continuing to enjoy, occupation of the land to the exclusion of any other co-owner,
	(ii) compensation to be paid by a co-owner to any other co-owner who has incurred disproportionate expenditure in respect of the land (including its repair or improvement),
	(iii) contributions by a co-owner to disproportionate payments made by any other co-owner in respect of the land (including payments in respect of charges, rates, rents, taxes and other outgoings payable in respect of it),
	(iv) redistribution of rents and profits received by a co-owner disproportionate to his or her interest in the land,
	(v) any other adjustment necessary to achieve fairness between the co-owners.

 

[DeeKie]

Surely set off would apply here? Even if party b is entitled to their original half they also owe half the mortgage paid to date which should be deducted?

 

[User321]

Appreciate the detailed comments, very helpful!

Up to now the dispute has been argued at a very high level and based on trying to settle (no focus on the facts, evidence, etc.). When does it get to that detail, is that done by legal counsel/ barrister when issuing the Court proceeding?

I feel if both sides outlined their case clearly with evidence and references to Law (as you have done here!) it would remove unsubstantiated claims and bring it closer to a meaningful conclusion. At that point, if it continues, at least each party is fully informed.....maybe this is wishful thinking!