As has been discussed in a number of previous blog posts, relationships and trusts make poor bedfellows. One of the difficulties that can be encountered is that the division of property, that would otherwise fall to be determined in accordance with the Property (Relationships) Act 1976, can be somewhat less straight-forward when what you are dealing with is the practical realities of co-owners who cannot agree on how to deal with property that is owned as tenants in common. That is each owner owns a recorded share of the property.
One remendy that can be available in this situation is that provided by the Property Law Act 2007. Where such an application is considered, matters taken into account include:
the extent of co-ownership
- the number of co-owners
the nature and location of the property
the extent of hardship to the aplicant if the order is refused, compared with the hardship to the co-owner or co-owners if the order is made
- the value of respective constributions
The court takes a pragmatic view of matters and is not constrained by matters such as those that might apply of the matter was heard under the relationship property legislation, even if the trust owned property was a family home for spouses or partners.
Usefully the court also has the power to order occupation rent. This can be a practical remedy when only one trust has had the effective benefit of the property due to the break-down of the relationship between the beneficiaries of the respective trustee owners.
However, a far more cost effective solution could be achieved if any property owned by multiple trustee owners is subject to a property sharing agreement that determines amongst other things, what will happen to the property if the parties separate.
Fuller v Smeets  NZHC 1283
- Dyas v Elliott  NZHC 607
- Property Law Act 2007, s 339 – 343
- Proeprty (Relationships) Act 1976