In Part 1, I gave a general background as to the types of issues that invariably get raised when this form of war breaks out.
If we are at the stage of “forcing” the sale, let’s assume that common senses has been pushed aside by emotion, anger and perhaps greed (it usually does in my experience).
This will usually take us down the path of the argument over who used the cottage more and should there be an adjustment for that. This is what we call “Occupation Rent”. Pretty simple concept. He who occupies the jointly owned land pays for its use.
Funny how simple concepts get real complicated real fast.
The worst is when both co-owners use the cottage, but not necessarily in equal amounts. The reason why that is the worst is that no one ever agrees as to the proportion of actual usage, assuming allocating percentages is the right way to go. So now there is the need to develop evidence.
I recently had an easy one. It was easy because one co-owner unilaterally abandoned any use of the property years ago. But we needed to force a sale. The occupying co-owner started squawking about my client’s share of the mortgage, insurance and taxes over the years, and tried to negotiate on the basis that my client should share in those expenses.
The interesting part is that when one co-owner voluntarily abandons use of the property, he/she cannot claim “occupation rent” from the occupying co-owner. That is, unless, the occupying co-owner (as in this case) started demanding recognition of such expenses. In that case, occupation rent can be claimed back.
Pointing that out (firmly I might add) finally allowed me to convince the other party to abandon the claim for expenses since once we took into account the notion of occupation rent, it would likely be a wash.
So common sense was restored, and the occupying co-owner finally agreed to simply buy my client out.