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Are actions of Division and Sale fair?

Are actions of Division and Sale fair?

Are actions of division and sale fair? If one or more persons have title to a property in Scotland all of them need to consent if there is to be a sale of that property. If the parties cannot agree on a sale or one or more of them simply 'disappears' then Scots law provides a remedy for a co-owner who wants to dispose of their interest. The remedy is an action of Division and Sale. In circumstances where the property cannot be divided, as in the case with most residential properties, the most likely result is that the property is sold and the proceeds split between the owners.

It is a misconception that any owner will be entitled to buy out other owner's interest. This point was soundly made in the case of Collins v Sweeney. The circumstances of this case were:

  • That a property which was incapable of division was owned in common by Mr Collins and Ms Sweeney
  • Mr Collins required it be sold
  • Ms Sweeney wanted to retain ownership and requested the court oblige Mr Collins to transfer his share of the property to her at a fair price
  • She argued the court had power to direct the disposal of the property and should ensure this was effected in an "equitable manner"

Lord Hope in his decision made clear he did not agree with Ms Sweeney's position. He stated fairness or otherwise had no place as a defence in an action for division and sale. If the owners of a property are persuaded by reasons of expedition or cost to dispose of their interest to co owners, and the property cannot be divided then the court's role is to demand and oversee a sale and division of the proceeds. Lord Hope's view was that to require the transfer to Ms Sweeney would be incompetent.

It is when sale proceeds are split that fairness has a role. It is not unusual for co owners to have joint title to a property but not to have contributed equally to its purchase. The facts and circumstances of each case will be different but where a division of sale proceeds in accordance with the owners respective interests in the title would lead to a party being unjustifiably enriched the court will award an equitable distribution of same.

If you'd like legal advice regarding division and sale or another property matter, get in touch with one of our experienced team.

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Written by : Christine Stuart

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