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Cohabiting couples are each entitled to possession of their co-owned property providing that the purpose of the joint property was to provide a home for them both. If this right is restricted in any way then the occupying party may become liable to pay a notional rent for his or her occupation of the other’s share in the property. This is called Occupation Rent.
The right to Occupation Rent arises when one party is actually or constructively excluded from his or her property. The party excluded may seek Occupation Rent from the party still in residence. A relationship breakdown will often be regarded as a constructive exclusion. The modern approach is to assess the relevant proportion of Occupation Rent based on the market rent of the property. However, in practice, the right to Occupation Rent is often cancelled out by a claim against the excluded party for re-imbursement of mortgage payments.
In Stack v Dowden (2005) the court’s approach was somewhat different as the occupying party was still caring for the parties’ four children in the family home. The property was initially purchased by the parties in order to provide a home for the whole family, including the children. As the property was still being used as a home for the children, the court found that no Occupation Rent was to be awarded to the departing party.
The remaining party may well be continuing to pay the mortgage payments due under the joint mortgage. Case law is unclear about whether the remaining party can claim only capital or interest payments or both.
Where the remaining party has made improvements to the property, he or she may be entitled to claim either the cost of the work to the property or the increase in value as a result of the work done, whichever is the lower figure.
When considering such cases, the court must conduct a review of “the whole course of dealing” between the parties and not just the issue of Occupation Rent, mortgage payments and improvements made to the property therefore the outcome is likely to be very different for each separating couple.
For further information and advice on this issue, and other family law issues, please contact us for a free initial consultation on 01992 306 616 or 0207 956 2740 or email us.Back to Law Articles