When you co-own property with someone else, disagreements about what to do with that property can quickly escalate into serious legal disputes. Whether you’re dealing with a relationship breakdown, inheritance conflict, or simply want to cash out your investment while your co-owner refuses to sell, you may feel trapped. Fortunately, NSW law provides a legal pathway to resolve these deadlocks through what’s known as a Section 66G application.
What is a Section 66G Application?
A section 66G application is a legal process under the Conveyancing Act 1919 (NSW) that allows a co-owner of real property to ask the Supreme Court to force the sale or division (partition) of the property when the co-owners cannot agree on what to do with it.
This powerful legal tool ensures that no co-owner remains indefinitely locked into property ownership against their will, providing a circuit-breaker when negotiations fail.
When Does a Section 66G Application Arise?
This process is typically used when two or more people own a property together (as joint tenants or tenants in common) and there is a dispute or deadlock where one or more co-owners want to sell or divide the property, but the others do not agree.
These disputes commonly arise in several scenarios:
- Relationship breakdowns, including divorce or de facto separations
- End of business partnerships where property was jointly purchased
- Inheritance disputes among beneficiaries
- Investment property disagreements between co-investors
- When one co-owner simply wants to convert their asset to cash by selling their share
How Does the Section 66G Process Work?
Attempt to Reach Agreement
Before commencing court proceedings, you should write to the other co-owner/s proposing a sale of the property or offering to sell your share. This step demonstrates a genuine attempt to resolve the dispute without litigation and will be looked on favourably by the Court.
This preliminary step is crucial: if agreement can be reached without the intervention of the Court, you could save tens of thousands of dollars in legal fees, court costs, and trustee charges.
Application to Court
If no agreement is reached despite genuine attempts at negotiation, any co-owner can apply to the Supreme Court of NSW for an order under section 66G. The application must be properly prepared with supporting documentation that clearly establishes your ownership interest and the basis for seeking the court’s intervention.
The Court Process
The Court will consider the application through a formal hearing process. This will involve the parties attending a court case and usually having to provide affidavits (written statements) about the circumstances of the case for the Judge to consider.
In most cases, unless there is a strong legal reason not to, the Court will grant the order. The main exceptions are if there is a binding agreement between the co-owners not to sell, or if selling would breach a legal or fiduciary duty. The Court’s general position is that co-owners should not be forced to remain in ownership against their will indefinitely.
Appointment of Trustees
If the order is made, the Court appoints independent trustees to take control of the property and sell it on behalf of the owners. These trustees are often professional insolvency practitioners, lawyers or accountants with experience in property sales and dispute resolution.
The Court usually orders that the trustee can charge for their work, often many hundreds of dollars per hour. This adds significantly to the cost of selling the property in addition to usual conveyancing costs, marketing costs and real estate agent’s commission.
After the Sale
Once the property is sold, the trustees follow a specific distribution process. They first pay out any debts secured against the property (like mortgages), then pay their own fees and legal costs, followed by the real estate agent’s commission.
The remaining money is then distributed to the co-owners according to their share in the property. Adjustments may be made for things like one co-owner having paid more towards the mortgage, rates, or improvements to the property.
The Cost Reality of Section 66G Applications
Section 66G is a valuable tool that enables the sale of a property where co-owners cannot cooperate. However, in almost every case it will cost you far more than if you can reach agreement. The involvement of lawyers, Court costs and hourly rates payable to the trustee/s appointed to sell the property on your behalf can easily consume a significant portion of the sale proceeds.
This is why seeking legal advice early in a co-ownership dispute can be invaluable. A skilled property lawyer can often help negotiate a resolution that avoids the need for court proceedings entirely, saving all parties considerable time, stress, and money.
Get Expert Guidance on Your Co-Ownership Dispute
If you’re facing a property dispute with a co-owner, don’t wait until the situation becomes irreversibly hostile. Early legal intervention can often facilitate agreement and avoid the substantial costs of a Section 66G application.
At Complete Legal, we help property co-owners throughout NSW navigate these challenging situations with clear, practical advice. Whether you’re hoping to negotiate a buyout, arrange a private sale, or need to pursue a Section 66G application, we’ll explain your options in plain English and work to achieve the best possible outcome.
Contact our experienced property law team today to discuss your co-ownership situation and explore your options for resolution.
