Just some property law lecture notes:
Occupation fee
Each co-owner is entitled to occupy the whole of the property along with any other co-owner who also chooses to do the same. Accordingly, there is generally no right for one co-owner to claim an occupation fee against another co-owner who is in possession of the property. The situations in which an occupying co-owner is liable for an occupation fee are set out in paragraph [1426] of Butt.
There are 2 cases specifically dealing with this issue. In the first of these, Luke v Luke 36 SR (NSW) 310, John Luke died leaving his estate subject to a life tenancy in favour of his widow with the remainder to his two daughters in equal shares as tenants in common. John Luke?s widow died in 1915 and Laura, one of the daughters, died in 1920. From that date until the trial in 1936, Ada (the other daughter) occupied the property. In 1929, Ada was removed as a trustee of the estate and the Public Trustee appointed. In 1932, Ada Luke became a bankrupt and in the case before the Court an order was sought that the Public Trustee be authorised to sell the real estate and that Ada Luke be charged an occupation rent. After considering numerous authorities Long Innes C J in Eq. cited the matter as follows:
?The conclusion to which I have come is that the contention that the defendant Ada Luke should be charged with an occupation rent in this case is neither supportable on principle, nor established by authority, and that , in fact, the balance of authority is to the contrary.
I make the order for sale as asked, and declare that the defendant Ada Luke is not chargeable with an occupation rent.?
The matter had also been considered in the case of Leigh v Dickeson (1884) 15 QBD 60 referred to earlier. In this 1884 English case a tenant of three-quarters of a property acquired the remaining one-quarter of the property as owner. He then became a tenant in common with the lessor of the three-quarters share and continued on that basis until the lease expired some 10 years after he became a tenant in common. Correspondence took place concerning the basis of his continued occupation but no agreement was reached. After the death of the owner of the three-quarter?s share, her executors sought to recover rent from the expiration of the lease. One of the Appeal Judges, Cotton, L.J. expressed his view as follows:
?The plaintiffs have brought an action to recover rent, and the defendant by his counter-claim raises the question whether one tenant in common is liable to another for the cost of repairs.
I think that the plaintiffs are entitled to succeed in their claim for rent. It has been urged that one tenant in common cannot recover against another for rent, for either of them may enjoy the possession. But in the present case the defendant, although he himself was tenant in common, had possession of the whole of the house by virtue of a lease from his co-tenant in common. A correspondence ensued, as to the terms under which he should remain in occupation of the house. Under these circumstances, I think that the defendant must be considered as holding exclusive possession of the house upon the terms of the lease, and therefore, that he is liable for rent at the same rate as was reserved by the lease.?
?As to the claim for improvements, it has been urged that no tenant in common is entitled to execute improvements upon the property held in common, and then to charge his co-tenant in common with the cost. This seems to me the true view, and I need not further discuss the question as to improvements. As to the question of repairs, it is to be observed that when two persons are under a common obligation, one of them can recover from the other the amount expended in discharge or fulfilment of the common obligation; but that is not the position of affairs here: one tenant in common cannot charge another with the cost of repairs without a request, and in the present case it is impossible even to imply a request.?
Improvements are not limited to physical improvements and can include mortgage payments because mortgage payments increase the equity in the property and the amount available for distribution.