Problems with Buying Property with Other People

October 14, 2016

As real property is regarded as a good investment, many people decide to purchase a property with family members or friends. What happens if two or more co-owners of a property fall out? If they can’t agree to dispose of the property and they are not in a position to buy out the one who wants to sell, then problems can arise. In such cases, the Courts will step in.

In those situations your lawyer will usually make an application to the Court under the Property Law Act (Qld) to appoint trustees to market and sell the property. Once the property is sold and debts paid, then the balance is divided among the co-owners. This is usually what happens with urban real property.

In certain circumstances, an application to partition the property can be made as an alternative to a sale where it can be shown that partition is “more beneficial” to the majority of co-owners. This is usually considered in farming properties where it is possible to give each co-owner a part of the land. If it is not possible to achieve a precise result which is fair to each co-owner, then the Court can order a monetary adjustment.

In these situations, a sale or partition can result in financial loss if the market is in decline. That is why, if someone wants out of co-ownership, the remaining owners need to be realistic and commercial in dealing with the issue. Simply saying “No” to a proposed sale is not a solution; it will simply take away your ability to negotiate the best settlement and put it in the hands of the Court. If you are involved with others in ownership, contact me for legal advice as to the best way to handle it.

The above commentary is general and depends on the individual circumstances. It should not be relied on without specific legal advice.