With housing prices again on the rise in New South Wales, it is not uncommon for friends and family to pool their resources in order to purchase property. Whilst such an arrangement can have great financial benefit, there is also the potential for these arrangements to result in a falling out, or to end up as a financial burden. A common question we get asked is “I have co-owned property – how do I sell my share?”
Like with all arrangements, it is best that they are recorded in writing prior to their commencement. Having a well drafted Deed or Contract that sets out the terms and conditions of the arrangement to co-own property allows the co-owners to know in advance what steps must be undertaken, or in what circumstances the property can be sold.
Familiarity between potential co-owners of property can result in the commencement of an arrangement with no terms and conditions. In a situation where a co-owner of property has arranged to purchase property without first outlining how to end their arrangement, they may be left paying rates and/or the mortgage for a property that they are no longer benefiting from.
In circumstances where the parties have not already agreed on terms and conditions to end their co-ownership agreement, the co-owners should attempt to mutually agree on ending the agreement for the sale of the property.
A mutual agreement to sell the jointly owned property is the preferred outcome. However, if such an agreement cannot be reached then the parties may have to commence proceedings under the Conveyancing Act (NSW) 1919.
Section 66G of the Conveyancing Act (NSW) 1919 allows a co-owner of property to apply to the Supreme Court in order to appoint a Trustee for the sale of jointly owned property.
In other words, the Court is asked to appoint a trustee to force an impartial sale of the property. The proceeds from the sale of the property are placed on trust, and once liabilities are paid, the balance is distributed between the co-owners.
In summary, when identifying the means to sell jointly owned property, co-owners should:
Watts McCray Lawyers can assist with the drafting of any pre-contractual Deed or Agreement prior to the purchase of property. We can also assist in negotiation of disputed matters, and apply to the Supreme Court on behalf of co-owners under Section 66G of the Conveyancing Act (NSW) 1919.
To get in touch with one of our friendly lawyers, please contact us here.