Occupation Rent: Who Pays When One Owner Stays

Part of: How to Win a TOLATA claim on a property following separation

Occupation rent is a payment a court can order from the co-owner who lives in a shared home to the co-owner who does not. Some people call it occupational rent. The law of England and Wales treats it as compensation, not rent, and it is never automatic (TOLATA 1996, s.13(6)). If you moved out after a separation, or your former partner now asks you for money because you stayed, this page shows how a judge approaches the figures. Our TOLATA property claim specialists assist and advise at every stage. This page covers the law of England and Wales only.

Reviewed by: Garry Steedman, Family Law Consultant (Divorce, Children & TOLATA), Kabir Family Law

What is occupation rent?

Think of it as a balancing payment between two owners rather than a tenancy. A tenant pays rent under an agreement with a landlord. A co-owner pays because a judge decides that fairness needs it. Courts reach for two sources here. The first is the Trusts of Land and Appointment of Trustees Act 1996. It allows conditions, including compensation, when one owner loses the right to occupy, and it lets a court make orders about them. The second is equitable accounting, the older set of principles judges use to settle sums between co-owners before a sale. Both routes land in the same place, because each one adjusts what the two of you finally walk away with.

When does a court order occupation rent?

Only when something makes it fair. In 2022, the Court of Appeal confirmed that the default position is no payment, and that the focus is on how the owner who stayed has behaved. So a judge looks for conduct by that owner, or some feature of their position, that justifies a different result. For example, the owner who stayed may have stopped the other owner using a right to live there that they wanted to use, perhaps by changing the locks. Alternatively, the owner who stayed may be making money from the home. Where a marriage has broken down, the spouse who leaves is in most cases treated as excluded from the family home, although judges stress that this is not a fixed rule. By contrast, an owner who left by choice, and would have been welcome back, usually has a weaker claim.

Who can ask the other owner to pay?

Usually the owner who left raises it with the owner who stayed. Check whether any of these situations match yours.

• You own the home jointly, but your former partner lives there alone.
• Your name sits off the deeds, though you hold a beneficial share.
• You left because home no longer felt safe.
• You still pay towards a mortgage on a house you cannot use.
• Your former partner refuses to sell, so every month of delay costs you.
• You stayed in the home, and a demand has just landed with you.

The question works from both sides. If your former partner has demanded payment, you can answer with what you have paid since they moved out. Either way, the earlier you understand the account, the calmer the conversation becomes.

How is occupation rent calculated?

No fixed formula exists. However, the figure usually comes from working through these questions in order.

1. What would the home let for? Local lettings evidence, or a valuer’s opinion, sets the open market monthly figure.
2. What share does the absent owner hold? A half share usually points to half of that figure, though a declaration of trust or the couple’s intentions can shift it.
3. Which period counts? The account usually covers the time since one owner left or lost access, up to sale or settlement.
4. What has the occupier paid? A judge can set mortgage payments and other outgoings on the home against the claim.
5. Would anything else make it unfair? A rise in the home’s value, or an understanding that no rent would be asked for, can reduce the award or remove it.

A worked illustration. These round numbers come from no real case. They only show how the steps fit together.

• The home would let for £1,200 a month, and you own it in equal shares, so the starting figure is £600 a month.
• The owner who stayed has also paid £250 a month of your half of the mortgage, so a judge may set some or all of that against the claim.
• If all of it counts, about £350 a month remains. Over 18 months, the account shows roughly £6,300.
• The sum often comes out of the occupier’s share of the sale proceeds, rather than as a monthly payment.

In practice those offsets can swallow much of the claim. So the honest answer for many families is a modest adjustment at the end, not a windfall along the way.

What is equitable accounting, and which credits count?

Equitable accounting is the process of settling what each co-owner has put in, or taken out, before anyone splits the sale proceeds. The Court of Appeal describes the court’s task as doing broad justice between co-owners, so three items come up again and again.

• Mortgage payments. What the owner who stayed has paid towards a shared mortgage sits on the other side of the account from any rent claim. Judges do not always treat capital and interest the same way, so take advice on it.
• Other outgoings. The occupier can also raise costs they have met for the home itself since the split.
• A rise in the home’s value. In Ali v Khatib, the Court of Appeal accepted that a judge may take an increase in the property’s value into account when deciding what is fair.

A judge reads both sides of the account together. That is why a claim for rent so often meets a claim for mortgage credit coming the other way.

Occupational rent checklist: what should you gather first?

• Do you know the date one of you moved out, or lost access to the home?
• Can you show who has paid each mortgage instalment since then?
• Do you have letting adverts for two or three similar homes nearby?
• Do you know how the home is owned, and whether a declaration of trust sets out your shares?
• Is there anything in writing about whether rent would be asked for, such as messages or emails?
• Did anything stop the owner who left from coming back, such as changed locks?

The calls a checklist cannot make for you

A list shows you what to gather. It cannot tell you whether the owner who stayed has done enough to move a judge away from the no-payment starting point, how the mortgage will be treated in your case, or whether the sum at stake is worth a dispute. Those are judgement calls, and they depend on your whole situation. Book a free initial consultation, where one of our specialists gives you initial advice on where you stand.

How do our specialists assist and advise on occupation rent?

Our specialists assist and advise from the first conversation. They explain where you stand, then set out what a court is likely to weigh in your circumstances. Evidence matters most, so expect practical help with rental comparables, mortgage statements and the dates that fix the period. If an offer arrives, a specialist talks it through with you, and prepares you for each stage should a court application become necessary. Nobody promises you a figure, because the judge holds that discretion. Instead, you get a realistic view of the range and the reasons sitting behind it.

How does a claim work, step by step?

1. Take advice early. A short conversation now often prevents months of argument later.
2. Gather the paperwork. Mortgage statements, bank records, letting adverts for similar homes and the date you left all matter.
3. Put your figures to the other side. The civil courts expect a clear letter setting out the claim and how the sum is worked out, a reply within a reasonable time (14 days in a straightforward case) and a real try at settlement first (Practice Direction on Pre-Action Conduct).
4. Consider an application. If talks stall, either owner can apply under TOLATA 1996, s.14 for orders about the property, such as a sale or a declaration of each share. Court fees apply, so check the official fee list on GOV.UK first.
5. Show the court the wider picture. Judges weigh the factors listed in s.15, including the purposes behind the purchase, the welfare of any child living there and the interests of a lender.
6. Fold the account into the outcome. Any payment often comes off the occupier’s share of the proceeds, rather than arriving as a separate monthly sum.

A separate route exists when someone had to leave, often after domestic abuse. If a court makes an occupation order, section 40 of the Family Law Act 1996 lets it order the person who stays to make periodical payments to the other. That route protects the home in the short term, while the ownership account waits for the wider settlement.

What can go wrong, and how can you avoid it?

• Assuming the clock runs on its own. A payment depends on exclusion, or on fairness in the account, so a diary note alone proves nothing.
• Ignoring the offsets. A claim built on market rent, with no credit for the mortgage, ignores half of what a judge looks at.
• Bringing no rental evidence. Two letting adverts for similar homes carry more weight than a confident guess.
• Waiting years before raising it. Old payments get harder to prove, and memories of who paid what fade.
• Letting the proceeds go first. Once a sale completes and the money is divided, there may be nothing left to set the account against.
• Tangling it with the children. Arrangements for a child follow a separate test, although a child’s home does affect how a court handles the property.

A cohabitation agreement or a declaration of trust can head off many of these arguments before they start. For married couples, the same ground sits inside a financial settlement after divorce.

What does the free initial consultation cover?

A free initial consultation is a conversation with a specialist, who gives you initial advice tailored to your circumstances. It does not include drafting or reviewing documents. Bring three things if you can: the date you moved out, a note of who has paid the mortgage since, and two or three rental figures for similar homes.

Frequently asked questions about occupation rent

How much occupation rent can you charge?

No fixed rate exists. A judge usually starts with the open market rent for the property, then looks at the share the absent owner holds. Next come the credits the occupier can raise, such as mortgage payments and other outgoings. The net figure can sit well below a full market rent, and sometimes nothing is due at all.

Can occupation rent be backdated?

Claims almost always look backwards. The account normally covers the time since one owner left or lost access, up to sale or settlement. However, a judge decides what is fair for that period. If the absent owner would have been welcome back, or was led to believe no rent would be asked for, the award may be reduced or refused.

Does the person who stays always have to pay?

No. Each owner normally has a right to occupy the whole property, so staying is not a wrong in itself. In fact, the Court of Appeal says the starting point is that no payment is due. The other owner has to show something more, such as that the occupier shut them out or is making money from the home. Where the occupier has carried the mortgage alone, that counts on their side of the account too.

Can the same claim arise after a death?

Yes, it can. When a home is shared through an estate and one of the owners lives there, the same principles apply between them. That includes the starting point that no payment is due. In fact, the Court of Appeal’s 2022 decision in Ali v Khatib concerned a family home that passed under a will, where some relatives stayed on.

What does tenant occupation mean?

Tenant occupation describes someone living in a property under a tenancy and paying rent to a landlord. A co-owner sits in a different position. They live there because they own a share, not because a landlord let them in. That difference explains why any payment between co-owners counts as compensation rather than rent. If you rent your home together instead, different rules apply, and our guide to transferring a tenancy explains that route.

Do married couples make these claims in divorce?

Not usually as a stand-alone claim. When a marriage ends, the court deciding the finances must look at all the circumstances of the case under section 25 of the Matrimonial Causes Act 1973. Civil partners have a matching rule in Schedule 5 to the Civil Partnership Act 2004. The court can weigh who lived where, and who paid the mortgage, as part of that wider picture.

Moved out, or asked to pay? Get advice before the sale money is split

Every month that passes makes the account harder to rebuild, and memories of who paid what fade fast. Book a free initial consultation, where one of our specialists gives you initial advice on occupation rent before you agree any payment or sale. You can also call 0330 094 5880, or return to our guide to TOLATA property claims.

General information about the law in England and Wales, not advice on your circumstances.

Expert Tip

Before you argue about a monthly figure, build a simple timeline: the date one of you left, the mortgage balance that month, and who paid each instalment afterwards. Many disputes shrink once that timeline exists, because the two claims start to cancel each other out. Keep any letting adverts you find as well, since a judge prefers real local evidence to a round number.

Iblal Iqbal, Partner & Family Law Strategist