Partition, Distribution of Proceeds, Occupational Rent

Partition, Distribution of Proceeds, Occupational Rent

Marziale v Adam 2022 BCSC 1308 dealt with the accounting and apportionment between two tenants in common  who for a number of reasons including occupational rent  could not agree on how to divide the sale proceeds.

Many of the cases relating to partition and distribution of the sale proceeds come down to arguments over occupational rent- ie one owner living in the subject premises to the exclusion of the other co owner.

Adjusting Accounts:

At para. 53 of Hedrick v. Graham, 2012 BCSC 1760, the Court states:

Next, I must determine if and how I should adjust accounts between the co‑owners in order to achieve an equitable sharing of expenses and revenues in accordance with the applicable law as set out above. The law is clear that on sale in lieu of partition, the court may “make all just allowances and give such directions as will do complete equity between the parties” (Dacyshyn v. Semeniuk, 2007 BCSC 71 at para. 43, citing Baker v. Baker, [1976] 3 W.W.R. 492 at p. 495).

Occupation Rent

A useful discussion of the background to a claim for occupation rent is found in Baker v. Baker [1976] 3 W.W.R. 492:

 Baker was a case of partition and sale of a property held in joint tenancy.  It concerned the break-up of a marriage where the parties ahd lived in the same home.

  The discussion of occupation rent in the Baker case arose in circumstances of “constructive ouster.” 


However, the court adopted as a general principle that “‘occupation rent’ is not necessarily measured by either the rental value of the property or the rent which an ousted owner may have to pay for accommodation elsewhere.  It is, simply, a form of compensation” (at 501).

            The first point I draw from Baker is that upon termination of the joint tenancy by court order for partition, the court may “in such proceedings make all just allowances and should give such directions as will do complete equity between the parties ”   

           The court in Baker goes on to refer to a series of quotations from old cases in equity at 495-496:

What is just and equitable depends on the circumstances of each case.  For instance, if the tenant in occupation claims for upkeep and repairs, the Court, as a term of such allowance, usually requires that the claimant shall submit to an allowance for use and occupation.

…if one tenant has made improvements which have increased the selling value of the property, the other tenant cannot take the advantage of increased price without submitting to an allowance for the improvements

…when…one tenant has paid more than his share of encumbrances, he is entitled to an allowance for such surplus…

…a co-owner in occupation should be permitted to deduct only payments on account of principal, but she would be able to deduct payments on account of mortgage interest, taxes and repairs during her period of occupation if she agreed to submit to an allowance for use and occupation.

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