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Account of amounts payable by co owners to each other

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account of amounts payable by co-owners to each other during the period of the co- ownership.. ACCOUNTING ON DIVISION/SALE 1. In determining whether to make an order under s 233 VCAT must take into account a. any amount that a co-owner has reasonably spent in improving the land or goods; b. any costs reasonably incurred by a co-owner in the maintenance or insurance of the land or goods; c. the payment by a co-owner of more than that co-owner's proportionate share of rates, mortgage repayments, or other outgoings in respect of that land or goods for which all the co-owners are liable; d. damage caused by the unreasonable use of the land or goods by a co-owner; 11
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12 e. whether or not a co-owner who has occupied the land should pay an amount equivalent to rent to a co-owner who did not occupy the land (subject to s 233(3) TO CONSIDER WHEN MAKING ORDERS… 1. S. 233(2) – MUST 2. Whether occupying co-owner should pay rent… A. OCCUPATION RENT 1. SO, if one co-owner lives on land, the other doesn’t, should they have to pay for it (the person living on it)? S. 233(3) says only times when you have to pay occupation rent. a. The 3 rd point (“c” on slide above) is new, the 1 st 2 points are from CL!!! b. “c” might occur when the relationship broke down, had to leave and pay rent elsewhere. c. The last point, “e”, is saying that the CL has been altered. It used to say you could claim if left on agreement, or that the amount claimed for occupation rent could NOT be more than claims for improvement. 2. These things can ONLY be ordered at time of sale and division (except the account stuff, in point “b”). B. COMMON LAW RULE AS TO IMPROVEMENTS 1. Occupying co-owner can claim for improvements only on partition/sale Is concerned with protecting poor co-owner from going into debt due to rich co-owner improving the house. 2. Allowance for improvements is the lesser of The cost of the improvements The increased value of the property resulting from the improvements Comes from case of Swar v Rogers Unsure if this will continue under the new legislation. 3. The allowance made by the non-improving co-owner is proportionate to his/her share in the property Basically, if you got 70% of sale, then you owe 70% of improvement cost. 4. Improvements are expenditures which increase the value of the property – as opposed to maintenance costs Slide BELOW, get half as tenants in common (50/50), hence $10,000 from $20,000 B. EXAMPLE OF ADJUSTMENTS FOR IMPROVEMENTS – COMMON LAW 1. A and B are tenants in common in equal shares. 5 years ago, B carried out improvements which cost him $30,000. This increased the value of the property by $20,000. What is the maximum amount that B can claim against A for improvements? 2. The increase in value ($20,000) is less than the expenditure (30,000), so B is entitled to an allowance of $10,000 from A, being half of the amount of the increase in value– unless A had agreed to share the cost of the improvements.
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