When co-owners of a property separate, it is common for one person to continue living in the property while the other moves out. In these situations, questions often arise about who should bear ongoing costs such as the mortgage, repairs or improvements, and whether any compensation or adjustment should be made when the property is eventually sold.
This process is known as equitable accounting – a means of ensuring that the financial outcome between co-owners is fair, reflecting both parties’ use of and contributions to the property.
Our TOLATA specialists can help you understand, pursue or defend equitable accounting claims, whether as part of a wider ownership dispute or a stand-alone issue.
What is equitable accounting?
Equitable accounting allows the court to adjust the financial position between co-owners where one has derived greater benefit from the property or shouldered more of the financial burden.
These adjustments are typically made after the court has determined the parties’ ownership shares under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) and ordered that the property be sold.
An equitable account can be ordered at the court’s discretion if this is deemed necessary to ensure that the final division of sale proceeds is fair in light of what each person has contributed or enjoyed.
Common claims
Typical equitable accounting issues include the following.
- Occupation rent: where one co-owner remains in sole occupation after the other has moved out, the occupying owner may be required to compensate the absent owner for the loss of use of their share of the property.
The rent is usually assessed on the property’s market rental value and the duration of exclusive occupation. - Mortgage payments: if one party has paid more than their fair share of the mortgage or other outgoings, they may seek reimbursement or a credit for those payments when the property is sold.
- Repairs and improvements: a co-owner who has funded improvements or essential repairs may claim an allowance for the amount expended or the uplift in value those works have added to the property.
- Outgoings and insurance: payments for items such as buildings insurance, major maintenance or other property costs can also be relevant, depending on the circumstances.
Each case is fact specific. The court will look at the particular circumstances of the case, including the conduct of the parties, the reasons which led to one party vacating, the nature of the payments, and the parties’ intentions.
How Birketts can help
Our TOLATA specialists can:
- advise you on whether an equitable account can be claimed
- quantify and evidence claims for occupation rent, mortgage contributions or improvements
- work with valuers and other experts to ensure accurate assessments
- negotiate fair settlements or represent you in court proceedings.
We act for both claimants and defendants, providing clear, practical advice focused on achieving a fair and proportionate outcome.
Our experience
- Acting for a client seeking occupation rent because of his ex-partner’s refusal to comply with an order for sale. Having heard our submissions and considered our expert valuation report regarding valuation, the court awarded occupation rent to our client. Our client was entitled to deduct the occupation rent awarded from his ex-partner’s share of the sale proceeds.
- Acting for a client seeking an account and reimbursement of renovation expenses relating to joint property. We successfully negotiated a settlement on the morning of the trial which required our client’s ex-partner to make a lump sum payment to compensate our client for his expenditure on the property.
- Acting for a client who worked abroad while his ex-partner and children continued to occupy their joint property. This arrangement went on for a number of years and the property fell into disrepair. We considered issues such as occupation rent, responsibility of the remaining co-owner and mortgage repayments. We obtained a surveyor’s report as expert evidence as to the condition of the property and the impact on its value. The court gave a favourable award to our client across all three points.
