Applying to Court for an Order for Sale
Buying a property with a friend can seem like a good idea, but what happens if things don’t go to plan? As tenants in common, the easiest way of sorting out this arrangement is to agree to buy the other out or decide on the best way to dispose of the property that works for both parties.
However, if neither party can agree then one option available to you is to apply to court for an order of sale. This can be a costly process and can cause animosity between the two tenants in common, which is why it is often a last resort.
What is an Order for Sale?
When a property is held in joint names, but a sale cannot be agreed upon, then one of the parties involved can apply to court for an Order for Sale. This is found in sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996.
If a property is owned jointly, except for very specific and unusual situations, the property is deemed to be held on what is termed as a “Trust for Sale”. As a result, the starting position is that if either party wants the property to be sold, it should be.
A court will therefore require very strong evidence to prevent a sale taking place.
A court will however expect the parties to reach an agreement if one party makes a reasonable offer to purchase the other party’s share.
Case Study - We Bought a House as ‘Tenants in Common’. I Want to Sell and the Other Person Doesn’t!
Q: Six years ago, my friend and I invested in a property as "tenants in common". When we bought the house, we both agreed that we would hold on the property for at least five years, and then look at selling it.
In the intervening years, I have got married, while my friend has left the UK and is working abroad. I’m now looking for the exit strategy that we discussed, but he wants to continue owning the property.
What are our rights? Can tenants in common force a sale? Or is there a way I can make him sell his share to me so that my spouse and I can own it and live in it as our family home?
A: Tenants in common each own a separate and distinct share in the property they've invested in.
Hopefully you entered into a declaration of trust at the outset, confirming the terms of your agreement. If you did, then that should contain provisions regarding the disposal of the property, so remind your friend of its terms. With this in mind, you should be able to try and reach an agreement.
However, if there was no declaration of trust, you could offer to buy out your friend for a fair price.
Forcing the Sale of a Property
If you can't agree, you could tell your friend that you intend to apply to court for an order for sale. This option will be costly and will be likely to reduce the property's sale proceeds. It may also prove to be a bone of contention between the two of you.
Ensure that the court awards you conduct of the sale – then you will at least have some control over events.
If your co-owner is particularly obstructive and refuses to sign anything, you could end up having to make an application for the court to sign the "contract for sale and transfer" – which is all costly. It is always much better if you can reach agreement and highlights the importance of confirming agreements legally at the start of a process.
How to Apply to Court for the Order for Sale
Applying to court for the Order for Sale is something that you should appoint a solicitor to do on your behalf. If there are no dependants living in the property or other special circumstances, then it will be very difficult for the other party
then this should be a relatively straightforward process. If there are other things to consider then it is well worth seeking legal advice before following this course of action.
To apply for order of sale you will need to issue proceedings at the County Court.
Apply for an Order for Sale with Howells Solicitors
If you’re looking for legal advice or representation to help you get through this stage, then talk to Howells Solicitors today. With a wealth of experience and friendly, professional lawyers who aim to make applying to court for order for sale as smooth as possible – talk to us today on 02920 404020.
