In my previous blog we looked at the case of Rowland v Blade (2021) in relation to the dispute over beneficial interest where one party had contributed all the costs associated with purchase but legal title was held jointly.
A further issue in that case which the courts had to determine was whether Dr Rowland could claim ‘occupation’ rent from Ms Blades.
The relevant legal provisions are contained in the Trusts of Land and Appointment of Trustees Act 1996 and state:
12 The right to occupy
(1) A beneficiary who is beneficially entitled to an interest in possession in land subject to a
trust of land is entitled by reason of his interest to occupy the land at any time if at that time—
- (a) the purposes of the trust include making the land available for his occupation (or for the occupation of beneficiaries of a class of which he is a member or of beneficiaries in general), or
- (b) the land is held by the trustees so as to be so available.
(2) Subsection (1) does not confer on a beneficiary a right to occupy land if it is either unavailable or unsuitable for occupation by him.
13 Exclusion and restriction of right to occupy
(1) Where two or more beneficiaries are (or apart from this subsection would be) entitled under section 12 to occupy land, the trustees of land may exclude or restrict the entitlement of any one or more (but not all) of them.
(2) Trustees may not under subsection 1.—
- unreasonably exclude any beneficiary’s entitlement to occupy land, or
- restrict any such entitlement to an unreasonable extent.
(3) The trustees of land may from time to time impose reasonable conditions on any beneficiary in relation to his occupation of land by reason of his entitlement under section 12.
(4) The matters to which trustees are to have regard in exercising the powers conferred by this section include—
- the intentions of the person or persons (if any) who created the trust,
- the purposes for which the land is held, and
- the circumstances and wishes of each of the beneficiaries who is (or apart from any previous exercise by the trustees of those powers would be) entitled to occupy the land under section 12.
(5) The conditions which may be imposed on a beneficiary under subsection 3. include, in particular, conditions requiring him—
- to pay any outgoings or expenses in respect of the land, or
- to assume any other obligation in relation to the land or to any activity which is or is proposed to be conducted there.
(6) Where the entitlement of any beneficiary to occupy land under section 12 has been excluded or restricted, the conditions which may be imposed on any other beneficiary under subsection 3. include, in particular, conditions requiring him to—
- make payments by way of compensation to the beneficiary whose entitlement has been excluded or restricted, or
- forgo any payment or other benefit to which he would otherwise be entitled under the trust so as to benefit that beneficiary.
(7) The powers conferred on trustees by this section may not be exercised—
- so as prevent any person who is in occupation of land (whether or not by reason of an entitlement under section 12 from continuing to occupy the land, or
- in a manner likely to result in any such person ceasing to occupy the land, unless he consents or the court has given approval.
(8) The matters to which the court is to have regard in determining whether to give approval under subsection 7 include the matters mentioned in subsection 4 (a) to (c).
Therefore occupation rent is compensation to a beneficial owner, who is entitled to occupy a property by virtue of their beneficial interest, and has been excluded from the property.
Rowland v Blades (2021) – The Relevant Facts
Dr Rowland’s claim was that he was excluded from the Property between 2009 and 2018 (110 months) because Ms Blades would not allow him to come to the Property with his new partner during this period. He sought occupation rent of £371,000 in total.
Rental value was supported by a single joint expert report. The basis for his report was:
- the total annual rent payable (assuming an assured shorthold tenancy) was put at £584,000;
- the total rental income for occasional weekend and short usage for short term licenses was put at £495,000;
- the average daily rate for occasional weekend and holidays during the period was £260 per day for long weekend (3 days) and bank holiday use and £104 per day for other days
Ms Blades accepts that she did exclude Dr Rowland and his new partner from the Property from 2009 until 2012 but not beyond that.
The court was reminded of that the purpose of the purchase was to provide a joint weekend/holiday home, rather than the normal family home.
The court found that Dr Rowland was excluded from the Property with his then partner from November 2009 until November 2015, as after that time he had broken up with his then partner and was not prevented from bringing a new partner to the Property.
The court ultimately decided:
Having regard to the statutory considerations, the breakdown of the parties’ relationship, Ms Blades’ prohibition of user by Dr Rowland in the company of the new partner and the weekend use made of the Property by Ms Blades since then to the effective exclusion of Dr Rowland, I consider that it is just that Ms Blades pay an occupation rent to Dr Rowland.
The period of exclusion was 1 November 2009 until 30 October 2015 (72 months) on average 3 days a week (weekends and either a Friday or a Monday)
The parties were unable to agree the figure for occupation rent and the court determined this at £59,958
Incidentally Dr Rowland was also ordered to pay 90% of Ms Blades’ costs with a payment of £100,000 to be made on account of costs which could be offset by the sum owed to him for occupation rent.
Where a Property is jointly purchased and each has a beneficial interest to occupy, you will need to be careful about excluding the other party without good reason or be prepared to have to pay for the luxury of occupying their share of the Property.
In ideal situations, a Deed of Declaration should be drawn up which provides for these scenarios in the event of a breakdown in the relationship to avoid ambiguity and costly litigation years later.
If you’re seeking legal advice relating to jointly owned property disputes please call our highly experienced property dispute experts on 0808 252 5231 to talk through your situation with us. Alternatively, you can request a call back online.