Part 2 – Forced sales of jointly owned property under TOLATA

This is the second instalment in a series of four articles, a collaborative effort between law firm Birketts and Citystay Property Agents, designed to help navigate you through the intricacies of property co-ownership. In this piece, we:

  • Outline the legal authority of the court to mandate a sale of a property owned by multiple parties under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA).
  • Discuss potential obstacles that may surface during the sale and strategies to address them.
  • Offer practical advice for effectively advertising a property on the market.

Ordering a sale under TOLATA

When the legal title or deeds of a property list two or more individuals as owners, the agreement of all named owners is required to proceed with the sale of the property.

If any of the owners refuse to give their consent, the owner who wishes to sell won’t be able to do so, leading to the continuation of the current co-ownership situation.

This scenario often occurs in the aftermath of relationship breakdown. When a cohabiting couple separates, it is typically the case that one of them will vacate the joint property and find new living arrangements, leaving their former partner in sole occupation.

The person who stays may resist the sale of the property if it benefits them to maintain the status quo. For instance, if they wouldn’t be able afford a comparable property with their portion of the sale proceeds, they might avoid discussions about selling the property: so long as the property isn’t sold, they can maintain their current lifestyle.

In some cases, the person who has relocated continues to contribute to the mortgage while also covering the expenses of their new accommodation. This can lead to feelings of unfairness and an urgent desire to break the existing stalemate.

To move forward with a sale in this scenario, a co-owner can ultimately make an application to court under TOLATA.  Under section 14 of TOLATA, the court has the power to order a sale and break the deadlock.

Assuming the dispute is limited to whether the property should be sold, such applications can be made under the more simplified procedure, known as the ‘alternative procedure’, under Part 8 of the Civil Procedure Rules governing litigation in England and Wales. This can help keep legal costs to a minimum. Nevertheless, litigation under TOLATA should not be underestimated and legal advice should be sought if you are considering making a claim.

Fortunately, if an applicant is successful with their application, the usual rule on costs is that the losing party will be required to pay a significant proportion of the winning party’s legal costs.  This can then typically be recovered from the paying party’s share of the sale proceeds.

Overcoming practical challenges

Achieving a court order for sale doesn’t always mean the process is over. What happens if the reluctant party, now compelled by the court to sell the property, resists the marketing and sales process or declines to sign the required conveyancing documents?

If the resistant owner occupies the property, they might exploit the situation to obstruct the sale. They could, for instance, deny estate agents access, neglect to maintain the property in a sellable state, or make discouraging remarks during viewings to dissuade potential buyers. In such cases, the court has the power to evict the occupying owner from the property, enabling it to be marketed with vacant possession. The court also has the power to grant one of the owners exclusive conduct of the sale, effectively excluding the uncooperative owner from the marketing process.

If the uncooperative owner refuses to sign the relevant conveyancing paperwork once a buyer is found, Section 39 of the Senior Courts Act 1981 (as applied by section 38 of the County Court Act 1984 in the lower courts) can be invoked to address this. This legislation empowers the court to nominate another individual to sign the conveyance (or any other document) on behalf of an unwilling owner. This way, an uncooperative owner can be bypassed to prevent them from obstructing the court’s order for sale.

When contemplating making an application of the types mentioned above, it’s important to have a bank of evidence available to the court to support your case. While these orders are available to the courts, the draconian nature of them means that the judge will need to be persuaded the order is warranted in your specific case. It is therefore advisable to keep a detailed record of any instances of intransigence on the part of your co-owner. If, for instance, your estate agent calls you to say that they could not go through with a viewing of the property because your co-owner refused to grant access, ask your estate agent to follow-up with you in an email to ensure there is a written record.

It is preferable in these circumstances for an agent to be communicative, transparent and impartial. The process can be challenging; however, Citystay Property Agents’ fresh perspective is built upon a foundation of taking a customer centric approach which does not shy away from handling challenging circumstances.

Top tips when marketing a property for sale

How your property is marketed is critical to the chances of achieving a sale at the most appropriate price. Honest, expert advice, twinned with a deep understanding of the local market, enables a reputable agent to establish an accurate market value. Current demand, size of property, construction and state of repair, age and property type, tenure, tenancies, service charges, other liabilities and particular features should all be considered. Similarly, an agent must remain fair and impartial with vendors, particularly when those vendors are a separating couple.

By remaining impartial in these circumstances, an agent can act in the best interests of both parties throughout the marketing process. This includes fairly and professionally representing the property in any photography and videography, providing professional advice on the staging of the property, and managing viewings in a considered and transparent manner to achieve the fairest outcome in the situation.

 

Citystay Property Agents are a full-service residential estate agency based in Cambridge. Our fresh perspective is built upon a customer centred approach, ensuring the best outcomes for all of our clients.

Birketts, our a dedicated Home Ownership Disputes team specialise in procuring orders for sale under TOLATA. They work with expert, local agencies such as Citystay Property Agents to give clients the best support possible.