Real property can be held in two different ways, namely, as joint tenants where two or more people own the property equally or as tenants in common where two or more people own the property together in equal or unequal shares and those shares are specified on the Certificate of Title.
- In the event that one owner want to sell their share of the property but the other owner does not, what happens then??
In New South Wales – Section 66G of the Conveyancing Act 1919 allows an owner to make an application to the Supreme Court for a trustee to be appointed to sell the property. There are costs involved in making this application and these will increase in the event that the application is opposed.
In Queensland – Section 38 of the Property Law Act 1974 allows an application to be made by one or more of the co-owners to make an application to the Court for a trustee to be appointed to sell the property. Again, there are costs involved in bringing this application and these will increase in the event that the application is opposed.
In both states, the property will vest with the trustee appointed by the Court until it is sold at which time the proceeds of sale will be apportioned between the parties, after payment of the trustee’s fees, real estate agents fees, auctioneers fees (if applicable) and legal fees in transferring the property.
The other owner of the property may offer to purchase the property from the Trustee, however, this option should be explored before making an application to the Court for a Trustee to be appointed.
- How to protect yourself from having to appoint a statutory trustee?
It is often the situation that you purchase a property with a friend or family member and due to the nature of your relationship with that person you do not enter a formal agreement with them. When looking at purchasing property with another person, it is important to consider the following issues:
- Are all parties aware of their obligations in relation to the payment of outgoings?
- If you own the property as joint tenants, upon your death your share in the property will pass automatically to the surviving owner.
- If you own the property as tenants in common, upon your death your share will be distributed in accordance with your Will.
- What will happen if your circumstances change and you need to sell your share of the property but the other owner doesn’t want to?
A simple partnership agreement can resolve a number of issues that may arise in the future between the parties. It will outline both parties rights and obligations in relation to the payment of outgoings and will also detail the options available if one party wants to sell their share in the property.
For more information please contact an Attwood Marshall Lawyer today on 1800 621 071.