Conveyancer and Property Lawyer
2009
Occupation rents and the Trusts of Land and Appointment of Trustees Act 1996: from property to welfare?
Susan Bright
Subject: Real property. Other related subjects: Trusts
Keywords: Co-ownership; Occupation; Rent; Trustees' powers and duties
Legislation: Trusts of Land and Appointment of Trustees Act 1996 s.13 (6)
*CONVPL 378 This article considers what changes have been made in relation to occupation rents following the enactment of the Trusts of Land and Appointment of Trustees Act 1996 (“TLATA”). The two particular questions focused on are “liability”, that is, the circumstances in which a co-owner can be required to pay an occupation rent (or “compensation” as it is called under TLATA) to a non-occupying co-owner, and “quantum”, that is how the amount of this rent should be assessed. The issues commonly arise in the residential context, when a property initially bought as a shared home is occupied by only one of the co-owners following relationship breakdown, but can equally occur in a commercial context, for example, as part of the dissolution of a business partnership run from co-owned premises.1
Prior to the Act, most claims arose in the context of claims for equitable accounting when the property came to be sold. The apportionment of the proceeds of sale between the co-owners would reflect not simply a division based on the size of their respective shares, but could be adjusted to take account of the fact that whilst the co-owner in occupation may have paid all of the outgoings on the property, such as mortgage instalments and maintenance payments, she also had enjoyed rent-free accommodation.2 Most cases were “backward looking”, *CONVPL 379 looking at past events,3 although occasionally a prospective order for future payment of an occupation rent would be made if the court declined to order a sale.4 The