Punishing the Reluctant Executor With Occupation Rent

Will claim Solicitors, specialist no win no fee will dispute and will contest Solicitors, discuss whether it is possible to punish a reluctant Executor (who is occupying the primary estate asset) with “occupation rent”

The case of the reluctant Executor (who is occupying the primary estate asset)

This is the scenario. An Executor to a Will is occupying the primary estate asset. He/she may or may not own part of the property. The ensuing problem is that the Executor who is enjoying the benefits of occupation has no incentive to leave and/or administer the estate so that the property he/she is living in is sold and the net proceeds distributed. So inevitably he/she sits on his/her hands and nothing is done to move the administration forward.

Unfortunately, this is quite a common problem. In a previous blog we explored options for frustrated beneficiaries in terms of removing or replacing the reluctant Executor with one who would pursue the administration to a conclusion. The article can be found here:

Removing an Executor in a Will Contest Claim (Before a Grant of Probate) – Will Claim Solicitors

What we didn’t consider was whether it was possible to further “encourage” the reluctant Executor to proceed with the estate administration by means of an “occupation rent”. What we envisage here is not actually charging the Executor rent prior to the estate administration – this is unlikely to be possible because the estate is not being administered anyway and because the Executor is unlikely to charge himself! But simply pointing out that once the administration is undertaken, an account will have to be made of the rent which he/she should have paid but did not – thus reducing the share he/she will receive once the final estate accounts are completed. This could then serve as an additional encouragement to the reluctant Executor to proceed with the administration and/or to acquiesce to someone else doing it in their place.

Occupation Rent – when is it payable?

This was a moot point in Ali v Khatib [2022] EWCA Civ 481 reported on Bailii at:

Ali v Khatib & Ors [2022] EWCA Civ 481 (08 April 2022) (bailii.org)

In this Court of Appeal decision there was a general restatement of the law. A number of cases were cited of which it seems the most important was Davis v Jackson [2017] EWHC 698. Snowden J’s Judgment in Davis setting out the key principles is quoted extensively:

62. He set out those principles derived from the authorities since Jones (AE) v Jones (FW) [1977] 1 WLR 438 and commented in relation to French v Barcham as follows:

“61. With respect to Blackburne J, I do not find this analysis entirely convincing. The earlier authorities of Jones (AE) v Jones (FW) [1977] 1 WLR 438 and Dennis v McDonald [1982] Fam 63 made it very clear that at law, the default position when one co-owner is in occupation and the other is not, is that occupation rent is not payable. It therefore seems to me that there ought to be some conduct by the occupying party, or at least some other feature of the case relating to the occupying party, to justify a court of equity concluding that it is appropriate or fair to depart from the default position and to order the occupying party to start paying rent. ”

62. In French v Barcham, Blackburne J rejected a similar argument, suggesting (at paragraph 40) that Dennis v McDonald and Re Pavlou had explained the concept of exclusion as a “state of affairs”+ in which the question was whether it was reasonable for the non-occupying party to exercise his right of occupation or not. His approach seems to have been that if it was reasonable for the non-occupying party to exercise his right of occupation, but that he had voluntarily chosen not to do so, he should not be able to claim an occupation rent: whereas if it was unreasonable for the non- occupying party to go into occupation, he should be entitled to rent.

In essence the starting point in every case is that a co-owner in occupation is not obliged to pay occupation rent merely because he/she 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/she should pay the other owner for his/her use and occupation of the property. As an example, where the occupying co-owner is exploiting the property for his/her financial gain, or that he/she has precluded the co-owner from exercising a right of occupation that he/she wanted to exercise. The focus should therefore be on the behaviour of the party in occupation.

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.

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