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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22807
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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Family members squatting in property have now placed a

Customer Question

Family members squatting in property have now placed a caveat on title.
Submitted: 1 year ago.
Category: New Zealand Law
Customer: replied 1 year ago.
My partner and I own a property that family members have 'rented' at market rates for the last 10 or so years.
The verbal agreement with them was that they would cover all costs on the property in lieu of staying there.For over a year, we have been trying to sell the property to them at their request, but they refuse to pay the amount that the bank requires (~360k) to transfer the title.
The current value of the property is approximately $500k.They have now placed a caveat on the title, which means we will not be able to sell the property.
They are also not paying any rent on the property, which is a huge financial burden as we have a young family.Please help!
Expert:  Chris The Lawyer replied 1 year ago.

You can continue to try to sell the property to others on the open market, and apply to court to remove the caveat, and for possession. You could also apply for possession in the Teanancy Tribunal if they are not paying rent. You will need to get a lawyer for the caveat removal, but they will have to pay full costs if this caveat was not justified. The caveat can be removed if the property has been sold, so they will lose out on the ability to purchase.

Customer: replied 1 year ago.
Hi Chris,Thanks for your response - to clarify your comment:
"...You can continue to try to sell the property to others on the open market, and apply to court to remove the caveat, and for possession..."Do you mean:
1. The property can still be sold i.e. will LINZ process a transfer of sale with the caveat in place?
2. Does the removal need to happen BEFORE the saleI don't really want to end up in a situation where the property is sold, and we can't complete the sale because the caveat is still in place and blocking the completion.Many thanks.
Expert:  Chris The Lawyer replied 1 year ago.

There are a number of options once you have a contract for the sale. The first would be to apply for an order removing the caveat through the High Court, which you can do at any time. The other would be to register the transfer to the purchasers with notice to the caveators (your relations) and they then have to apply to court to maintain the caveat. These are under the Land Transfer Act, and can be pushed quite quickly. If a court finds they have an interest in the property, this wont stop the sale but may mean the cash is tied up until that is resolved. But they would have to do the arguments to justify this. Your property lawyer should know about this, although I would suggest you will need a litigation specialist

Customer: replied 1 year ago.
Hi Chris, is litigation something you have help with and what costs are we looking at for this - ballpark.
Are you Auckland based or elsewhere?I have friends in your field, but due to the nature of the issue I am not comfortable approaching them as it is a little embarassing to be honest....By the way, the property in question actually has a mortgage on it, so if the cash is held up at time of sale (because of the caveat) then it may simply make things messier....My thoughts (please correct me if I'm veering off on a tangent..):1. Tenancy tribunal order to vacate + recover unpaid rent
2. Formal notice confirming cancellation of S&P agreement as it is no longer valid
3. Sale of the property and notice to relations (as per your advice earlier)In your experience, does this ever end easily?
Expert:  Chris The Lawyer replied 1 year ago.

Yes for the tribunal. And you may need to formally cancel any agreements to sell if they have run out of time. And as for ending easily, I always suggest mediation as better than a court case.

Customer: replied 1 year ago.
Hi Chris,So I filed the Tenancy tribunal application and was sent the below in response by their lawyer.By the way - can you help us with the litigation or recommend someone that you know?
Obviously as a direct engagement rather than via here.Further, we have been advised by our clients that you have made an application to The Tenancy Tribunal (Ref:(###) ###-####. We would like to bring to your attention that your relationship with our clients has never been one of landlord and tenant. We have been provided with email correspondence that confirm you have been holding the property on trust for our clients.
As noted in our previous letter, a caveat has been registered over the title for the property to protect our clients ' beneficial interest in the property.
Our clients are looking to have this matter resolved amicably as soon as possible so we would appreciate a response from you by Wednesday 23 March 2016. If we do not hear from you, our clients will have no choice but to engage a barrister and the matter would have to be dealt with in the High Court.
Expert:  Chris The Lawyer replied 1 year ago.

The issue is the nature of the benficial interes they are claiming in the property. That is unclear from your question although they appear to be claiming you hold the property on trust for them. If that is the case then they need to prove the nature of the trust. You do need to brief a litigation specialsit and work through this in stages, resolving whether they really do have an interest and whether this was a tenancy. This is likely to need some litigation in the High Court

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