Geraldine Morris examines the issues of occupation rent & equitable accounting in cohabitant cases
Most family lawyers have been faced with this question from time-to-time: if one party moves out of a jointly owned property, does the occupying party have to pay rent to the non-occupying party? Occupation rent was considered in-depth in Stack v Dowden [2007] 2 FCR 280 and most recently in Akhtar v Hussain [2012] All ER (D) 225 (Nov). The answer is. unfortunately for the family client who would like more clarity, not clear-cut.
The issue of the potential payment of an occupation rent arises most frequently in cohabitant cases. Prior to the enactment of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) such issues were determined by the equitable principles of “equitable accounting” or “equitable compensation”. In Stack v Dowden Baroness Hale stated that those equitable principles were replaced by TOLATA 1996, ss 12 and 13. However there are references to the principles and pre-TOLATA 1996 case law in subsequent case law and in
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