Where land is owned by multiple people (whether as joint tenants or tenants in common), any one of the owners can approach the Supreme Court to seek an order for the appointment of a trustee for sale and for the property to be sold.
Ordinarily, the owners can come to agreement on the need for a sale and the basis on which it is to be conducted. For example, following some negotiations or a mediation, the co-owners may agree to:
- sale by auction with an agreed reserve price;
- sale by public treaty with an agreed price; or
- sale by one owner to another, with agreement on how the price is determined (such as agreeing on a valuer or methodology).
When co-owners are in a dispute however as to whether a property should be sold, when and on what terms, the provisions of section 66G of the Conveyancing Act 1919 (NSW) can be utilized to force the sale of the property, even where the other owner (or owners) do not want to sell it.
Once appointed, the trustee has the legal power to sell the property on the best terms available and to engage real estate agents, valuers and lawyers/conveyancers as may be required. So as to help ensure that the property sells for fair market value and to avoid any breach of trust allegations from any of the owners for not obtaining the best price possible, it is sensible for a trustee to sell at public auction
A usual order made is that the unsuccessful party (usually the defendant/respondent) pays the plaintiff /applicant’s legal costs. The costs risk arising from litigation (which can be substantial in amount) is usually a key factor in out of court settlements being made.
Applications for the appointment of a statutory trustee for sale are generally only refused in special circumstances, such as where the is a prior agreement not to sell, around the terms of any sale or to sell only when certain conditions are met (which is why any co-ownership agreements ought to be in writing as verbal evidence can be less persuasive).
Usually, after a successful application is made and the property is sold, the proceeds of sale after payment of:
- any encumbrances (such as mortgages and unregistered mortgages secured by caveats);
- the costs of sale (real estate agent and auctioneer fees and marketing costs etc); and
- the trustee’s costs
are held on trust by the appointed trustee and then distributed proportionally according to ownership.
Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to family disagreements in relation to land or estates or any business or commercial dispute, contact Craig Pryor on (02) 9521 2455 or email email@example.com.
This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal needs.