If you want to sell a property which you co-own in NSW, what happens when the other owner doesn’t? Luckily, section 66G of the Conveyancing Act 1919 provides a solution.
People purchase residential or commercial property together for a variety of personal or business reasons. However, if circumstances change, one co-owner may wish to sell or divest their interest while their fellow co-owners don’t and are unwilling or unable to buy the former out.
In the event such a scenario arises, section 66G can be of great assistance. This is why we have developed the following article in conjunction with Nick Dale, to provide you with a general overview of the process and what steps a co-owner should take for the appointment of a trustee to the property.
When is section 66G typically used?
The most common reasons why disputes over the sale of co-owned assets arise are typically due to the following situations:
- a co-owner becomes bankrupt and his or her share in the property vests in his or her trustee in bankruptcy.
- a breakdown occurs in the personal or business relationship between co-owners resulting in them wanting to separate their property interests.
- co-owners simply cannot agree on a sale process or sale price.
If co-owners cannot resolve their dispute privately, a co-owner can apply to the Supreme Court of New South Wales (or the Federal Court of Australia in cases of a bankrupt co-owner) for an order appointing trustees for sale of the property under section 66G of the Conveyancing Act 1919.
An order under section 66G is discretionary, but if the application is prepared and presented carefully and a consent from experienced trustees is obtained, it is highly likely to succeed, and the sale of the property will follow.
In the recent case of Ambrus v Buchanan  NSWSC 1628, the Supreme Court ordered the appointment of trustees to sell a property on application of a co-owner holding a 1.79% interest, even though the other co-owners opposed the application.
On the other hand, the Court will not appoint trustees for sale or order the sale of a property if:
- the co-owners have made a contrary agreement.
- it would be unconscionable to make the orders.
- where the co-owners hold the property on trust and the trust instrument contains its own procedure for sale.
The Court usually orders that the legal fees paid in making the Court application, and the trustees’ expenses and fees are to be paid out of the sale proceeds on or after completion of the sale. It is vital that the application to Court seeks appropriate orders which minimise the risk of disputes, and simplify the processes which will apply to approval and payment of expenses and fees. That way, the time taken to complete the job can be shortened, and the costs of completing the job can be minimised.
How Levi Consulting can help
Levi Consulting has extensive expertise and industry connections to support co-owners whose home is in dispute. Before you file your application to Court, Levi Consulting will prepare an outline of tasks we intend to complete, from the day of appointment to the completion of the sale and will put forward a proposed fee scale. David Levi is a Registered Liquidator with deep experience in 66G appointments. Levi personnel will consent to act as Trustees.
When a Court orders trustees to be appointed and a sale of the property, we would typically take the following steps to preserve, protect and sell the property including:
- becoming registered on title
- obtaining vacant possession of the property if necessary
- taking out insurance
- collecting rent between the time of their appointment and completion of the sale, from any tenants, and leasing up the property, where appropriate
- enhancing the appeal of the property and carefully selecting the most suitable real estate agent to market and sell it
- devising a sale strategy with the agent, with the intention of achieving market value by private treaty or by auction sale
- exchange contracts, attend to settlement, pay out costs of sale, mortgages and caveats on title, expenses and fees of the trusteeship, legal costs of the application and distribute net proceeds to co-owners.
Recovering your money
Acting as the trustee, after the sale we would hold the sale proceeds on trust for the co-owners in proportion to their ownership interests. We would then distribute the net sale proceeds proportionately among the co-owners in accordance to their interests shown in the title details for the property.
It’s important to note that there can be exceptions and adjustments where a co-owner has:
- contributed disproportionately to the purchase price or to the mortgage repayments relative to their interest in the property recorded on the title (e.g. where one of the co-owners has paid the entire purchase price or made all the mortgage repayments)
- paid rates, strata levies or utilities disproportionately to their interest in the property recorded on the title
- made improvements to the property that have benefitted all co-owners by increasing the value of the property
- occupied the property without compensating other co-owners and is liable to pay an occupation fee as a result.
Seek professional help
When it comes to disputes over selling a co-owned property, it’s important to seek professional help and expertise. This is why we have partnered with Nick Dale, because an experienced trustee and legal team can ensure that all parties are treated fairly, and can help guide the sale process to a successful conclusion.
Don’t hesitate to seek the help of a trustee if you are facing a co-ownership dispute. It could save you a lot of time, money, and stress in the long run.