What was the case about?
The case concerned a property in Stockton-on-Tees which was, originally, in the sole ownership of Ms X.
By 2005, the property, which was subject to a mortgage, was jointly owned by Ms X and Mr Y who were, at one point, in a relationship and the carers of Mr Y’s grandson, J.
The parties’ relationship deteriorated and, around 2006, Ms X left the property. Later, in October 2016, the joint tenancy was severed, so they were holding the property in distinct half shares.
Mr Y applied for an order for the sale of the property and various orders Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996).
Ms X objected on the basis that the property should be kept for J’s benefit. She applied for an occupation order to allow her to move back in. She also claimed an occupation rent from Mr X to reflect Mr X’s exclusive occupation of the property and her exclusion from such date as the court determined. That claim was based on a ‘constructive ouster’ of Ms X from the property, and it was said to give rise to a credit of about £45,000.00 by way of occupation rent. Ms X said that when calculating the shares of equity in the property, she should be given credit for this amount. Not surprisingly, Mr Y objected.
What is ‘occupation rent’?
If you rent a property from a landlord, you pay a rent to the landlord because the landlord allows you to live in a property that is owned by the landlord. If you jointly own a property with someone else, that means you do not own all of the property. If you alone are living at the property and the other owner is not living there, then you are using your half of the property but you are also using the half of the property that is not owned by you but owned by the other person. Occupation rent is the amount that the court says it is fair to be paid by the person occupying the property to the other co-owner for using the other co-owner’s share of the property.
So applying it to this case, Ms X was saying Mr Y owned her rent for the period that he had remained living in the property and using her half of the property when she could not live there because the relationship had broken down.
What was the outcome?
The first judge said no, Ms X could not have the occupation rent because, amongst other reasons, she could not show she had been locked out or had a court order excluding her. This decision was appealed by Ms X.
The appeal court allowed the appeal and sent the case back to be looked at again. The comment was that the test applied by the first judge was too strict and did not quite apply the correct test as set out in TOLATA 1996. The law was clear that, under TOLATA 1996, a court could order credit for an occupation rent if it was just (fair) to do so, whether or not there was any proof of ouster (court order excluding occupation). It was a wider test.
Why is this important?
Often one party will move out from a property and then the remaining party will refuse to sell or change the locks or refuse to pay all of the mortgage. As with all family matters, it really does depend on your situation but take legal advice if this situation applies to you.
The judgment is available at: [2021] EWHC 2971 (QB)