If your ex refuses to sell a jointly owned property, they may not be able to prevent a sale indefinitely. We explain your options.
You have separated. You both own the house. You want to sell it, but your ex refuses.
They might refuse to sign an agency agreement, reject every offer, refuse access for inspections or simply say they are not moving.
It can feel as though nothing can happen unless both owners agree.
That is not necessarily the case.
There are legal mechanisms that can be used to deal with jointly owned property when one owner refuses to cooperate. Which one is appropriate depends on the circumstances, including whether there is a family law property settlement underway.
If your ex refuses to sell a jointly owned property, they cannot necessarily prevent a sale indefinitely.
For separated couples, the first question is usually whether the property should be dealt with as part of a family law property settlement.
In other co-ownership disputes, section 66G of the Conveyancing Act 1919 (NSW) allows a co-owner to apply to the NSW Supreme Court for the appointment of trustees for sale.
Once appointed, the trustees can take control of the sale process so that it no longer depends on the cooperation of the co-owner who has been refusing to sell.
The right process depends on why you own the property together and what other financial issues remain unresolved.
Refusing to agree to a sale can certainly delay things.
It does not necessarily give one owner a permanent veto over the property.
If two people are registered owners, an ordinary voluntary sale will generally require both of them to cooperate.
That means one owner can create a practical stalemate by refusing to sign documents or engage with the sale.
The law provides ways of resolving that stalemate.
For separated married or de facto couples, however, the answer is not automatically to commence Supreme Court proceedings.
The house may form part of a broader family law property settlement involving other assets, liabilities, superannuation and financial claims.
The appropriate strategy needs to take that broader position into account.
Court proceedings are not necessarily the first step.
It may be possible to reach agreement about:
Sometimes the real disagreement is not whether the property should eventually be sold.
It is about when it should be sold, what it is worth or how much each person should ultimately receive.
Those are different disputes and should be treated differently.
A formal proposal setting out how the sale will occur can sometimes resolve the problem without litigation.
Your ex may propose keeping the property instead of selling it.
That can be a legitimate option if the overall property settlement permits it.
Usually, that means working out the value of the property and whether the person retaining it can refinance the mortgage and fund whatever payment is required to the other person.
The bank is important here.
An agreement that one person will “take over the mortgage” does not itself release the other borrower.
The lender generally needs to approve the refinance.
If your ex says they want to keep the house but cannot obtain finance, the property may ultimately need to be sold.
Section 66G of the Conveyancing Act 1919 (NSW) provides a mechanism for dealing with property held in co-ownership.
One or more co-owners can apply to the Court for trustees to be appointed over the property on a statutory trust for sale or, in an appropriate case, partition.
For residential property disputes, the practical result commonly sought is the appointment of trustees for sale.
Once appointed, the trustees take responsibility for the sale process.
This means the sale no longer depends on every registered owner voluntarily cooperating.
That can break a stalemate where one co-owner simply refuses to sell.
Section 66G applies to property held in co-ownership.
That can include property owned as:
The provision is not limited to former couples.
It can arise where property is owned by:
The fact that one person owns a smaller percentage does not, by itself, prevent them from seeking an order.
The legislation permits an application by “any one or more” of the co-owners.
If trustees for sale are appointed, the property is vested in them for the purpose of carrying out the statutory trust.
In practical terms, they can take control of the sale process rather than leaving it in the hands of two owners who cannot agree.
The orders and circumstances of the particular case will determine the mechanics.
The process may involve matters such as appointing an agent, arranging the marketing of the property, dealing with offers and completing the sale.
This is why a section 66G application can be effective where a co-owner has been obstructing an ordinary sale.
The legal structure of the sale changes.
Living in the property does not, by itself, give a co-owner an indefinite right to prevent the other co-owner from seeking a statutory sale.
Section 66G gives the Court power to appoint trustees for sale where property is held in co-ownership.
However, that does not mean every case is automatic or that other legal rights and proceedings can be ignored.
For example, there may be:
The existence of one of those issues does not necessarily prevent a sale, but it can affect the appropriate procedure and orders.
Not necessarily.
This is an important distinction.
For example, two people may be registered as 50/50 owners but one claims they contributed substantially more to the purchase price or paid substantially more of the mortgage.
There may also be claims concerning renovations, rates, occupation of the property or other expenditure.
A dispute about whether the property should be sold is not necessarily the same as a dispute about who is ultimately entitled to the proceeds.
There may need to be an accounting between the co-owners or separate claims concerning their beneficial interests.
For separated spouses and de facto partners, the division of property may instead need to be determined as part of the family law property settlement.
This is where careful advice is particularly important.
If you and your former spouse or de facto partner are still resolving your property settlement, the house is usually not an isolated asset.
The overall financial position may include:
The Federal Circuit and Family Court of Australia has powers to make property orders between separated spouses and de facto partners.
Depending on the circumstances, orders can deal with the sale or transfer of property and the steps required to implement that outcome.
For that reason, commencing separate Supreme Court proceedings under section 66G is not necessarily the first or best course merely because your ex refuses to sign a sale contract.
The interaction between the two jurisdictions should be considered before proceedings are commenced.
Section 66G can be particularly important in co-ownership disputes that do not fall within the family law property jurisdiction.
For example, two siblings might inherit a property together.
One wants to sell.
The other wants to keep living there indefinitely but cannot afford to buy the first sibling's interest.
Or two friends may have purchased an investment property together and later disagree about whether it should be retained.
Where there is no contractual or other legal mechanism for resolving the disagreement, section 66G may provide a way of bringing the co-ownership to an end.
A mortgage does not disappear simply because trustees for sale are appointed.
The mortgage and other interests affecting the property need to be dealt with as part of the sale and settlement process.
Ordinarily, a secured lender will need to be paid in accordance with its rights before the remaining net proceeds can be distributed.
This is one reason it is important to distinguish between the sale price and the amount the owners actually receive.
From the sale price there may be deductions for matters such as:
The remaining amount is the net equity available to be dealt with between the parties, subject to any dispute about their respective entitlements.
Costs require more nuance than simply saying that the owner who refuses to sell will have to pay them.
NSW decisions recognise a usual starting position in section 66G proceedings that the parties' costs associated with obtaining the appointment of trustees for sale may be paid from the proceeds of sale.
The rationale is that the cost of bringing the co-ownership to an end can be regarded as an incident of the joint ownership.
However, costs remain a matter for the Court.
The Court can take the parties' conduct into account and may depart from the usual position in an appropriate case.
There are also costs associated with the trustees carrying out the sale and administration of the statutory trust.
For that reason, commencing proceedings simply as a negotiating tactic should not be treated lightly.
The cost of litigation needs to be weighed against the value of the property, the amount in dispute and whether a negotiated sale can still be achieved.
Delay can take many forms.
A person may refuse to select an agent, insist on an unrealistic asking price, refuse access for photography or inspections, reject reasonable offers or simply fail to sign documents.
If the parties are negotiating a voluntary sale, the agreement should be detailed enough to prevent one person from frustrating it later.
That may mean dealing expressly with:
Where family law Consent Orders are being prepared, these implementation provisions can be just as important as the order that the property be sold.
The fact that children live in the family home is relevant in a family law property matter, but it does not necessarily mean the home can never be sold.
Under the current Family Law Act property framework, the Court can consider the extent to which a party has the care of a child under 18, including the need to provide appropriate housing for that child.
That consideration forms part of the broader property settlement assessment.
It does not create an automatic entitlement for one parent to retain the family home.
The practical question may instead be whether the property should be sold now, transferred to one parent, or dealt with in another way as part of the overall settlement.
Section 66G also arises frequently in estate and family property disputes.
For example, siblings may become co-owners of property following a death and disagree about what should happen to it.
An executor or administrator may also become involved in a co-ownership issue when administering an estate.
Estate disputes can introduce additional considerations, including:
The existence of an estate dispute does not necessarily mean co-owned property must remain tied up indefinitely.
It does mean the sale and estate issues need to be considered together.
Start by working out what the real dispute is.
Is your ex saying the house should never be sold?
Do they want to buy you out?
Are they asking for more time?
Do you disagree about the value?
Or is the real disagreement about how the proceeds will eventually be divided?
The answer affects the strategy.
If you are separated from a spouse or de facto partner, the first step is usually to consider the house within the overall family law property settlement.
If the dispute is a pure co-ownership dispute and agreement cannot be reached, a section 66G application to the NSW Supreme Court may provide a mechanism for bringing the co-ownership to an end.
The important point is that one co-owner's refusal to sign a sale contract does not necessarily mean the property can never be sold.
Urban Law Group advises on family law property settlements and NSW co-ownership disputes, including matters involving section 66G of the Conveyancing Act 1919 (NSW).
If a jointly owned property has reached a stalemate, we can advise on the options for resolving it and whether the appropriate pathway is negotiation, family law proceedings or an application for trustees for sale.