Legal Hypothetical – Property dispute between co-owners


Property dispute between co-owners

Henry and Peter purchase a large rural property together.

The property has four dwellings on it.

They agree to each live in one of the larger homes and they each choose one of the other cottages to rent-out and each receive the rental income from that cottage.

They agree to contribute equally towards the mortgage repayments and outgoings and to share the responsibility of maintaining the property.

Excited by the prospect of their joint venture, they do not worry about putting anything in writing.

They purchase the property as tenants-in-common.

Several years later, the dwelling that Peter resides in is damaged by a flood and he moves out. He continues to receive the rent from his other dwelling.

Henry and Peter agree that Henry shall be entitled to be paid for the time that he spends maintaining the property.
Again, nothing is put in writing.

Peter finds it difficult to pay his share of the mortgage and outgoings, including insurance and rates and he decides that he wishes to sell the property. Henry continues to pay the whole of these expenses.

Peter commences Supreme Court action (known as a 66G Application) and Henry reluctantly agrees to the sale.

The property is ultimately sold but a dispute arises regarding the distribution of the proceeds of sale.

Peter claims that he is entitled to Henry paying him an occupation fee. He also claims that he is entitled to a portion of the rent that Henry has received.

Peter also refuses to pay Henry for his maintenance of the property and refuses to pay his share of the outgoings.

The matter is ultimately resolved at a Court ordered mediation, at significant cost to the parties.

If YOU would like a particular issue addressed, please email Manny at [email protected] or call him on (02) 6648 7487.


By Manny WOOD, Solicitor

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