Australia: Can you be forced to sell a jointly owned property?

Co-ownership of real property occurs where two or more people are jointly registered proprietors of land, either as joint tenants or as tenants in common. While it may seem reasonable to assume that a co-owner is free to deal with their property as they choose, this is not always the case.

Relevant circumstances

If co-owners are unable to agree whether jointly owned property should be sold or transferred, the co-owner(s) wishing to sell the property may commence proceedings in the Supreme Court under section 66G of the Conveyancing Act 1919 (NSW). This section empowers the Supreme Court to (among other things) order the transfer or sale of a property.

When such orders are made the co-owners' interests in the property are vested in trustees that are proposed by the parties and/or appointed by the Court. A number of factors are taken into account when the Court considers and appoints trustees, which will usually be addressed by the party seeking the appointment and sale. Once appointed, the trustees will then engage conveyancing lawyers and a real estate agent to sell the property as the co-owners would have done, had they been in agreement.

Discretion

While the Court can refuse to make orders under section 66G, it is an established principle that co-owners are entitled to an order almost as of right, particularly so if they hold a sizeable share in the property. Orders are usually always made unless there are circumstances which would make the appointment and sale unfair on the other parties. The onus of proving a relevant unfairness rests with the co-owner resisting the sale. There are only limited circumstances where the Court would refuse to order a sale.

Sale

Once the sale is concluded, with the trustees stepping into the owners' shoes to market and sell the property, the proceeds (less sale expenses and any costs owing to the trustees) are paid to the parties as agreed or as ordered by the Court or, alternatively, into a trust account pending the resolution of any disagreement as to the parties' entitlement to the sale proceeds.

If you find yourself in a situation where you are in a dispute regarding jointly owned property, our specialist property lawyers can help.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.