Basically, there is unity of possession between all co-owners, whether equitable joint tenants or equitable tenants in common. In Bull v Bull1 this was held to apply also to a party entitled to a tenancy in common interest under a resulting trust. There was a continuing right to occupy unless and until an order for sale was made. The occupation amounts to a requirement of the occupier's consent before a sale takes place but failure to give consent could result in an application to court, originally under s.
Law of Property Act 1925, now under s14 Trusts of Land and Appointment of Trustees Act 19962. This decision was, however, distinguished in Barclay v Barclay3, where a house was left by will to in trust for five sons in equal shares. It was held that the trustee could claim possession from one of the sons who was in occupation, without the need to bring proceedings for an order for sale. Bull v Bull was distinguished on the basis that the house there had been bought for the purpose of occupation by the resulting trust beneficiary.
That did not apply where the true purpose was a sharing of value rather than occupation by any particular party. The distinction drawn in Barclay v Barclay was approved by the House of Lords in City of London Building Society v Flegg4 and is confirmed by section 12 Trusts of Land and Appointment of Trustees Act 1996 which provides that "A beneficiary who is beneficially entitled to an interest in possession in land subject to a trust of land is entitled by reason of his interest to occupy the land if at any time (a) the purposes of the trust include making the land available for his occupation ..or (b) the land is held by the trustees so as to be so available"5 provided that the land is not "either unavailable or unsuitable for occupation by him".
Section 13 Trusts of Land and Appointment of Trustees Act 1996 gives power to the trustees to regulate the right of occupation including excluding or restricting the entitlement of any one or more beneficiaries to occupy where there are two or more beneficiaries so entitled7 provided that this may not be done unreasonably8.
These powers may not, however, be exercised "so as to prevent any person who is in occupation of land…… from continuing to occupy the land" unless that person consents or the court has given approval9. In exercising them, the trustees are to have regard to the intentions of the parties who created the trust, the purposes for which the land is held and the circumstances and wishes of the beneficiaries entitled to occupy under s.
1210. As these are powers of the trustees, application may be made to the court under s. 14 in relation to them. Whilst these provisions appear to be directed more to express trusts of land than to co-ownership trusts, they can apply to a co-ownership trust. Thus if the co-owners, as trustees for each other, are unable to agree obn a sharing of occupation, application may be made to court. This occurred in Rodway v Landy.
11 A purpose build surgery was held as joint tenants by two doctors who carried on a practice in partnership from the premises. The partnership broke up and, the doctors being unable to agree, it was ordered that the premises be physically divided with each doctor occupying one part separately from the other. Apart from the property law position as above, a person with a beneficial interest giving the right to occupy can in certain cases apply to the court for an occupation order under s. 33 Family Law Act 1996.
The section applies if the premises were the home or intended home of the applicant and a spouse or former spouse, or heterosexual cohabitant or former cohabitant, or a person to whom the licensee was engaged in the previous 3 years, or a relative or member of the same household other than as an employee, lodger or boarder. The court order, which may be limited in time and will cease on the death of either party, may declare and/or enforce the right to occupy including by exclusion of the other co-owner.
Conditions may be imposed requiring periodical payments to be made in respect of the occupation, if the respondent is excluded, or imposing obligations on either party regarding repair and maintenance or the discharge of outgoings12. In considering whether to make an order the court will take into account the housing needs and resources of the parties and of any child, their financial resources, their conduct to each other and the likely effect of the order on the health, safety, and well-being of the parties and any child. 13
(ii) Rent Linked with the question of rights of occupation is the question of whether rent is payable between co-owners where only one of them is in occupation. The basic principle was that as there is unity of possession, no rent would be payable merely because one co-owner voluntarily abstains from occupation whilst the other is in occupation: rent only becomes payable if there is an ouster, or exclusion, of one by the other14 or it is otherwise inequitable for no compensation to be paid for having the sole benefit of the property.
This was applied in Jones (AE) v Jones (FW)15 where legal title to a house was bought in a father's name but with a son contributing 25% of the purchase price and with the intention that it be a hone for the son. Following the father's death, the legal title and the father's 75% share passed to his widow16 who claimed a 75% rent. The Court of Appeal held that in the absence of an ouster, no rent was payable. However, in Dennis v McDonald17 Purchas J held that the break up of a marriage or similar relationship was equivalent to an ouster in that the party leaving does not do so entirely voluntarily.
Thus, if one party continues to occupy a rent should then be payable, assessed as being the proportionate part of a fair rent such as would be ordered by a rent officer under the Rent Act 1977. In that case the female party had left her cohabitee because of his violence. Purchas J. made clear, however, that he was not relying on the violence as the ouster justifying the order of rent but on the break-up of the relationship, for whatever reason. This decision was followed in Re Pavlou18 where, however, Millett J.
referred to the difficulty of ascertaining whether the relationship has truly broken up so that the party leaving does not do so voluntarily or whether the party leaving is in desertion and would be welcome back. He therefore decided that rent should only be payable as from the time the occupying party issued divorce proceedings. These principles have now been replaced, at least in cases where both parties have a right to occupy, by the provisions of s. 13(6) Trusts of Land and Appointment of Trustees Act 1996.
This provides that where the trustees exclude or restrict the right of occupation of a beneficiary to occupy they may impose conditions on an occupying beneficiary "requiring him to (a) make payments by way of compensation to the beneficiary whose entitlement has been excluded or restricted, or (b) forgo any payment or other benefit to which he would otherwise be entitled under the trust so as to benefit that beneficiary. " As noted above, the provisions of section 13 appear to be directed more to express trusts of land with the trustees being different people than the beneficiaries but s. 13(6) may apply if the court, under s.
14, exercises the power under the section regarding exclusion of a co-owner. In Stack v Dowden19, the House of Lords held that where the question of compensation for occupation came before the court, this was to be treated as an application under s. 14 and that the question of whether compensation was payable will depend on the s. 15 factors, as on a sale application, rather than on the old principles regarding ouster. Therefore if the sole occupation by one party is fulfilling an object of the acquisition of the property, as in that case by continuing to provide a home for the children, compensation will not be payable20.
The need to apply s. 15 factors, rather than the old principles, was followed by the Court of Appeal in Murphy v Gooch21. It followed that, in a case where there were no children, that continued occupation by one former partner to the exclusion of the other was not in accordance with original purpose and that a full occupation rent should be payable. This could be set off against the liability to contribute half of the mortgage and other payments in respect of the house.
Although in Stack and Murphy, the principles under the Trusts of Land and Appointments of Trustees Act were said to completely replace the old principles, Blackburne J in Re Bacham22 distinguished those decisions as only applying where the party out of occupation had a right of occupation, which could be said to have been excluded under sections 12 and 13 TLTA. The Act did not apply where there was no such exclusion of right. In Re Bacham, one of the joint tenants had become bankrupt so that his equitable share vested inn his trustee in bankruptcy. The bankrupt and the other joint tenant, his wife, continued to reside in the property.
It was held that the bankrupt's trustee in bankruptcy could claim an occupation rent from the wife under equitable principles, rather than under the Act. There was therefore no need to consider the s. 15 TLTS factors but rather the question of whether a payment would be fair and equitable. 23. As seen above, if the court includes an exclusion provision in an occupation order under s. 33 Family Law Act 1996 it may order the party in occupation to make "periodical payments" to the other. It may also make orders regarding responsibility for mortgage payments or rent.