Occupation fees and credits when one co-owner lives in the property

16 Oct Occupation fees and credits when one co-owner lives in the property

Each co-owner is entitled to possess the whole property, so living there is not, by itself, a reason to pay the other co-owner. But the court can charge an occupation fee in some cases, for example where it was unreasonable to expect the other co-owner to keep living there after a relationship broke down and they moved out. Occupation fees, unshared rent, and credits for mortgage payments and improvements are usually dealt with when the sale proceeds are divided.

Why living in the property is not automatically chargeable

Co-owners hold undivided shares. Every co-owner has an equal right to possess the whole property, and none has a right to exclusive possession of any part. A co-owner who lives in the property is exercising their own right, so occupation alone does not make them liable to the others.

When an occupation fee can be charged

The Court of Appeal has said an occupation fee is chargeable in a number of situations, including where it is unreasonable to expect co-owners to keep living under the same roof after a domestic relationship has collapsed and one of them moves out (Callow v Rupchev [2009] NSWCA 148 at [71]).

Jacobsen v Spoljaric [2025] NSWSC 842 (22 July 2025) applied that principle. The plaintiff left the property in 2015 when the relationship ended and was excluded from it from then on. The defendant stayed until he was evicted in 2024. The court charged an occupation rent of $68,920.64 against his share of the sale proceeds, calculated from a market rent valuation.

In Tran v Tran [2025] NSWSC 843 (24 July 2025), the court allowed $2,700 for the period after the defendant had been ordered to give vacant possession until he was evicted under a writ of possession. The weekly figure was supported by a rental appraisal from a local agent.

Rent from tenants must be shared

In Tran v Tran, the defendant had rented part of the property to a tenant and shared the rent with the plaintiff, then stopped. The court ordered the trustees to deduct the plaintiff’s unpaid share of the rent, $11,152.31, from the defendant’s share of the proceeds and pay it to the plaintiffs.

Credits the occupying owner can claim

The account works both ways. A co-owner who has paid more than their share can claim credits:

• Mortgage repayments on a loan both co-owners were liable for (Ryan v Dries [2002] NSWCA 3, applied in Parkas v Shankar [2025] NSWSC 1140).
• Improvements, limited to money actually spent. In Parkas v Shankar, the court held this does not extend to the value of the co-owner’s own time and labour.

Other deductions from a share

A co-owner’s conduct can reduce what they receive in other ways. In Jacobsen v Spoljaric, the court also deducted from the defendant’s share $60,750 the trustees had to remit to the ATO for foreign resident capital gains withholding, because he did not provide a withholding certificate, and charged a significant part of the trustees’ costs against his share because his conduct had caused them. In Rance v Dempsey (No 6) [2026] NSWSC 673, a co-owner who unreasonably opposed the sale paid the other side’s costs from her share.

What to keep

• The date you moved out and why, with any messages that show you could not reasonably stay
• A rental appraisal or market rent valuation for the period claimed
• Records of rent received from any tenant and what was paid to each owner
• Bank and loan statements showing who paid the mortgage, rates, insurance and repairs

These claims are usually made in the section 66G proceedings, and carried out by the trustees for sale when they divide the proceeds. If you are planning a buy-out instead, the same adjustments apply. See buying out a co-owner.

Related guides

• Jointly owned property disputes: forcing a sale in NSW
• Trustee for sale appointments
• Buying out a co-owner in NSW
• Joint tenants vs tenants in common in NSW
• Bankruptcy and jointly owned property

Common questions

Do I have to pay rent if I live in a jointly owned property?

Not just because you live there. Each co-owner is entitled to possess the whole property. But the court can charge an occupation fee in some situations, such as where the other co-owner moved out because it was unreasonable to expect them to stay after the relationship broke down.

How is an occupation fee calculated?

In recent NSW cases the court has used a market rent valuation or a rental appraisal for the period claimed. The amount is usually deducted from the occupying co-owner’s share of the sale proceeds.

What if my co-owner is renting the property out?

Rent received from tenants should be shared according to the co-owners’ interests. In Tran v Tran [2025] NSWSC 843, the court ordered the trustees to deduct the unpaid share of rent from the defendant’s share and pay it to the other co-owners.

Can I get credit for paying the mortgage?

Generally, yes, for instalments you paid on a loan both co-owners were liable for (Ryan v Dries [2002] NSWCA 3). Keep loan and bank statements to prove it.

Can I claim for my own work on the property?

Not for the value of your time and labour. In Parkas v Shankar [2025] NSWSC 1140, the court limited the allowance for improvements to money actually spent.

Sources: Jacobsen v Spoljaric [2025] NSWSC 842; Tran v Tran [2025] NSWSC 843; Parkas v Shankar [2025] NSWSC 1140; Rance v Dempsey (No 6) [2026] NSWSC 673; NSW Land Registry Services, What are the types of tenancies in which a property may be held?. This article is general information, not legal advice about your circumstances. Last reviewed: 16 October 2026.