Paying An Occupation Rent To A Co-Owner Who Is Not Living In A Jointly Held Property
Will claim Solicitors, specialist no win no fee will dispute and will contest Solicitors, discuss whether a Court can order the occupier of a jointly held property to pay occupation rent to his/her co-owner
Paying an occupation rent – when does it come up in Will claims, Will contest and Will disputed claims?
The payment of an “occupation rent” is not often an issue in Will dispute and Will contest claims. In general it seems to arise in adult child or dependency claims under the Inheritance (Provision for Family and Dependants) Act 1975. See for instance:
Does an Adult Child Need to Have a Moral Claim to Win – Will Claim Solicitors
Does an Adult Child Have a Better Claim Against a Neglectful Parent? – Will Claim Solicitors
In essence where the party bringing the claim is occupying the main estate asset (the deceased’s former property), it is usually wheeled out by the opposing party as a means of putting pressure on the applicant (under the ’75 Act) to settle – on the basis that if they don’t they could end up owing the estate money – namely a market rent charged for his/her occupation of the property.
But when does it become payable?
The claim for an occupation rent is usually presented by the opposing party to the Will dispute and/or Will contest claim dispute, as a fete accompli – in other words it must be paid and can be charged. However, what is clear from the case law is that this is simply artifice. It cannot automatically be charged in every case and in fact it must be adjudicated on because the position is one of “shades of grey” rather than absolute clarity.
Ali v Khatib [2022] EWCA Civ 481
In this Court of Appeal decision, the issue was extensively considered. For a full account:
Ali v Khatib & Ors [2022] EWCA Civ 481 (08 April 2022) (bailii.org)
As alluded to above, it was argued that an occupation rent should inevitably be paid by the party who was in occupation to the party who was not. Cited in approval was French v Barcham [2009] 1 WLR 1124:
French v Barcham & Anor [2008] EWHC 1505 (Ch) (04 July 2008) (bailii.org)
In this case, Blackburne J held that the court will “ordinarily if not invariably” order the payment of an occupation rent and it was therefore submitted that there was a presumption that an occupation rent will be payable in such circumstances.
In Ali the Court of Appeal found that this was not in fact the case and that a Judge was entitled to make findings as to conduct, to evaluate the case on its own facts and exercise his/her discretion so as to do “broad justice” to the parties. Lady Justice Andrews (who though not giving the lead Judgment) provided the following helpful explanation of the Courts approach:
Lady Justice Andrews:
72. I agree that the appeal should be dismissed for the reasons given by my Lady, Lady Justice Asplin. I simply wish to add my own endorsement of the observations made by Snowden J in the passage at [61]-[64] of his judgment in Davis v Jackson. The starting point in every case is that a co-owner in occupation is not obliged to pay occupation rent merely because he is living in the property and the co-owner is not. Something more has to be shown which makes it just and equitable that he should pay that other owner for his use and occupation of the property – for example, that he is exploiting the property for his own financial gain, or that he has precluded the co-owner from exercising a right of occupation that he (or she) wished to exercise. The focus should therefore be on the behaviour of the person in occupation.
73. It follows it cannot be right, as a matter of principle, that the obligation to pay occupation rent should turn on the reasonableness or otherwise of the behaviour of the non-occupying party in not occupying the property. Yet that is the effect of Blackburne J’s analysis in French v Barcham, which appears to me, with the greatest respect, to be based on a mischaracterisation of the underlying rationale of earlier authorities such as In re Pavlou. There may be all kinds of scenarios in which it is reasonable for a co-owner of property not to exercise his right of occupation, but it does not follow that this automatically provides justification for making the co-owner who is in occupation of that property pay him rent.
74. Snowden J rightly pointed out in Davis v Jackson that Blackburne J’s approach would have the result, as a virtually immutable rule, that an occupation rent should be payable to a trustee in bankruptcy, thus reversing the default position in bankruptcy cases. Mr Darton’s submissions involved an extension of that approach, which would reverse the default position in all, or virtually all, other cases. I respectfully agree with what my Lady says in paragraph 68. There is no special rule in bankruptcy cases; French v Barcham is best regarded as turning on its own particular facts and not as laying down any principle of wider application.
75. At the end of the day, the question for the court is what fairness requires on the facts of the individual case. In the present case, the judge took into account all relevant factors, and concluded that justice and equity did not require a departure from the default position. He was entitled to do so, for the reasons that he gave.
If you consider any of these facts and matters are of interest, are likely to apply to you, or you would like to ask us for more information about our no win no fee arrangement, or you simply want us to assess your claim, then please do not hesitate to contact us for a confidential no strings chat and/or visit us at www.willclaim.com.
We provide details about our no win no fee arrangements at https://www.willclaim.com/nowin-no-fee/.