Forcing a property sale after separation

Hi all,

I’m looking for some guidance regarding my options to force a sale of a property jointly owned with my previous partner.

Essentially, the property has negative LVR (say 15k in debt, not allowing for sales cost etc), has a parental guarantee on it from my parents, with my ex still living in it after I moved out (some 2 years ago).

She refuses to pay rent or rent out the second room to offset some of the mortgage, is unwilling to sell through an agent and wants to wait until the market turns around before considering a sale. I have offered her my half of the house and offered to take her half, none of which were acceptable to her.

I just want to get rid of the place, even at a loss, such that I can move on. I think the real issue I have is the parental guarantee and trying not to impact my parents’ property.

I would appreciate any advice as to any options to remove the parental guarantee (I do not have a cash deposit to offset that) and/or potentially force a sale.

 

A family lawyer maybe?

 

I am not a lawyer, but have seen this situation before. I would go and get some proper legal advice, no wonder she doesn't want to sell if she doesn't have to pay rent- of course none of what is reasonable is acceptable to her. Your legal advice may include approaching the court for interim orders to force the sale of the house. If this is granted, this will allow the property to be sold and give a timeframe for which it should be sold. I wouldn't let it continue. You need to provide good records of who has paid what (mortgage, insurance, rates etc) and any correspondence you have had re payments and her refusal to pay.

 

You would need to see a lawyer, if the property settlement family law has finalised you would need to see a property lawyer to get a trustee appointed to take title and sell the property. Would need to go to the supreme court so would be costly.

see

Legal Tip 70: Two owners of a property - one wants to sell the other doesn't Legal Tip 70: Two owners of a property - one wants to sell the other doesn't

 

Yep thats the first thing I did. Their advice was that my “family law” options were essentially limited to VCAT and trying to get an order for the sale of the property.

Alternative options regarding defaulting and buying back, ways to remove guarantees etc are beyond family law and become a property law issue

 

Is there a property settlement involved or are you only referring to one single asset?

 

So you have an answer then? Are you sure they said VCAT?

 

Yes I agree. I want to get something done now. My concern is around both the legal costs for getting orders and the fact that if it doesn’t sell at the imposed reserve then I am back to square one.

 

A single asset.

 

Can you withdraw/revoke a guarantee?

 

Well I have a answer, what I am trying to understand is whether there are any other alternatives.

It may be that my best approach is to get order to sell the property and if no offers come in then I buy it (if that options is even available to me).

Yes, aparently VCAT as it has been more than two years since separation.

 

This is what I want to understand. If I can get the guarantee off, then at least we are equally exposed.

 

Hi Terry,

The advice I received was that this would be a VCAT matter for sale of the single property given the time since separation (apparently a 2 year period to bring matters to the court). Rather than a court matter for division of all assets (super etc). This may very well be my best recourse. Would you have any ideas on what the typical legal costs associated with this would be and likelihood of orders to sell? If orders were granted, would I be able to purchase the property? I just don't want to go down that path and it doesn't sell and then I am back to square one and a big legal debt.

 

Even though the two years have passed, if you were defacto, my understanding is that you still should formalise the property settlement. This could be an extension of the consent orders or perhaps a binding financial agreement. Apparently BFA is the less desirable option.

You can't really get around these as you will exposed to risk of claim further down the track.

This doesn't mean you have to split everything 50/50 but there has to be some sort of settlement.

 

I have been in this situation. This was a de facto relationship with a property owned tenants in common in NSW.

After listing the property for sale, genuine offers very close to the asking price were rejected. The agent subsequently terminated the sales agreement.

I did spend a lot on legal fees to resolve the situation which ended up that my ex refinanced the property and title was transferred over. This included a financial settlement and then conveyancing on the property.

In my view I obtained the best possible outcome but it was only possibly with a lot of strategic thinking and well-crafted legal correspondence.

Paying for good quality legal advice and following it is my recommendation.

 

The purpose of a guarantee is to provide additional security to the bank. If they could be easily withdrawn (particularly in a situation like this with negative equity) they would have no value at all. The only way a guarantee can be withdrawn is if the bank agrees to it and that would most likely only happen if you provided some other additional security in its place.

 

Was this advice from a lawyer?
I don't practice in the area of property law so have no idea on fees for this.

 

I am a family lawyer, and I find it pretty hard to believe that was the advice - unless there's some weird procedure in Victoria that I haven't heard of.

Normally you would just apply for family law property orders and seek leave to proceed outside the limitation period.

Did you actually see a proper family lawyer?

I don't see how dealing with it outside of family law jurisdiction would be an advantage either. Why are you so reluctant to just do it under the proper jurisdiction?

 

No reluctance. The advice I was given was that I would be making an order to VCAT. Whether its VCAT or a court doesn’t really impact my decision on what I do next unless there is a major cost discrepancy.

The way I understood it was that VCAT would only be dealing with the physical property. Whereas an application to the court would then consider all property.

I am simply trying to ascertain whether the costs involved with forcing a settlement are going to be so large that it doesnt warrant a sale in the current market, whether I could purchase the property if an order was enforced and/or whether there are any other alternatives I have not considered that stops my being tied to my ex through a mortgage.

 

This advice was from a family lawyer