Trustees Of Land & Appointment Of Trustees Act 1996 – Occupation Rent

Leasehold And Freehold Reform Act

When a property is owned by two people who both have a beneficial interest in the property and one person vacates leaving the remaining person living in it, the Court may make an order for the person residing in the property to pay occupational rent to the person no longer living there.

As this type of award is at the discretion of the Court, the powers they have are vast.

When may occupational rent be awarded?

One example of where an occupation rent may be awarded is where the sale of the property has been deferred. The occupying party may be ordered to make a provision for rent to the non-occupying party for the duration of the deferral.

Factors the Court may take into consideration when deciding whether a non-occupying party is entitled to a payment of occupation rent are:

  • Whether the non-occupying party actually has a right to occupy the property.
  • The intentions of the parties when purchasing the property. These intentions could relate to responsibilities towards any children and whether the property was purchased with the intention of it being a family home.
  • If any agreements were made between the parties as to how the everyday living expenses were to be dealt with during the relationship and whether this arrangement was breached.
  • How any payable occupation rent should be calculated, taking into account the current market rentable value of the property on the open market and the proportion of occupation rent that should be paid in accordance with the level of the beneficial interest held in the property.

Each case will be decided based on its facts and occupation rent will not automatically be awarded upon an application for it.

Murphy v Gooch [2007] EWCA Civ 603

The Court has stated in Murphy v Gooch (at para [14]):

  1. ‘…the task of the Court must now be [Post-TOLATA 1996], not merely to do justice between the parties, but to do justice between the parties with due regard to the relevant statutory considerations and in particular (where applicable) the welfare of the minor, the interests of secure creditors and the circumstances and wishes of the beneficiaries specified.’

    As there are so many factors to be considered when it comes to an application for occupation rent it’s advised to speak to a professional to see what the chances are of a claim being successful.

    How can we help?

    Kirria Hearn is a Trainee Solicitor in our expert Dispute Resolution Team.

    For more information regarding the subjects discussed in this article, please contact Kirria or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online form.

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