Disputes over joint ownership of land / property? - A solution: divide or sell by court order

Our dispute resolution team are often asked by clients if there are ways that they can get out of co-ownership of a piece of land that they own with another person.

In some cases, they will own the land with siblings, a friend, or a business partner.

There may have been a falling out, a disagreement about the purpose to which the land is to be put, or whether it is to be kept and rented out, or sold and the sale proceeds distributed.

If the parties can't get to a negotiated agreement themselves, there is another solution which our team can assist with.

Section 126 (1) of the Property Law Act allows a co-owner (or collection of owners) with at least 50% ownership of the land to apply to the Supreme Court for either:

1. partition (which divides up the land between the parties); or
2. an order to sell all of the land.

In addition, in certain circumstances (including where someone may disagree), s126 (2) allows the Court to order a sale at the request of any party with an interest in the land.

Generally, the Court will order the land be sold rather than divided, unless the other party can show a good reason why it shouldn't be sold. This is generally the ‘cleaner’ option and where the parties want to end their involvement with each other.

In deciding whether to order a sale, the Court will consider:

1. the nature of the land;
2. the number of parties involved; and
3. any other relevant circumstances.

It is important that any orders for the sale of the land are carefully considered and written to ensure the sale process is as smooth as possible.

Factors to consider include agreement around any real estate agent engaged to sell the land, the reserve price for the sale, and if there are to be any restrictions on any of the parties bidding to purchase the land.

Our team have experience helping clients with sale orders in many situations, including:

1. Where a beneficiary under a will inherited a majority share in land, which was held with the de-facto of her deceased sister. Our client lived interstate and wished to sell her share and take the proceeds of this.
2. Where a sibling was required to go into high care for health reasons and could not reach agreement with his brother to purchase his share of the land, or have it sold in its entirety.
3. Where partners of a business had a falling out and had conflicting views about how the business premises were to be dealt with.

If you are in a difficult situation and trying to work out how to deal with a piece of land that you co-own, feel free to contact our dispute resolution team to work through your legal options.?