TOLATA – The Court’s Power To Resolve Ownership Disputes re Property or Land

The Trusts of Land and Appointment of Trustees Act (TOLATA) 1996 is a relatively unknown legislation, yet the impact of this statute has a profound impact on the lives of millions of people in England and Wales, largely without them even knowing.

TOLATA 1996 gives the Court power to resolve disputes about ownership of a property, or land. Those disputes are largely between cohabiting couples, but may also be between cohabiting friends and family members.

With marriage on the decline, the number of cohabitating couples is increasing. In 2017 there was an estimated 3.3 million cohabitating couples in England and Wales representing approximately one fifth of family units. Furthermore, the number of cohabiting couples was the fastest growing type of family in the UK between 2004 and 2014.

However, despite the widespread public opinion to the contrary, there is no such thing as ‘a common law marriage’. This means that on the breakdown of a cohabitating couples’ relationship, irrespective of how long that cohabitation has existed, the law relating to those cohabitating couples is strictly limited to property rights and interest.

Put simply, cohabitating couples do not have the same financial claims as separating married couples. Such claims in respect of property are governed by TOLATA 1996, making it arguably one of the most important legislations for modern relationships.

Joint Tenants vs Tenants in Common

Before considering TOLATA 1996 in more detail, it is useful to firstly explore property ownership, and how that looks in practice.

When parties purchase a property together, they will either own that property as ‘Joint Tenants’ or ‘Tenants in Common’.

‘Joint Tenants’ have equal rights to the whole property. If one of them were to die, the whole property would automatically pass by the rules of survivorship to the co-owning joint tenant or tenants.

‘Tenants in Common’ however sees the beneficial co-owners owning specified (sometimes different) shares of the property. Importantly, if one of them were to die, their share would not automatically pass to the co-owning tenant or tenants, but rather in accordance with their Will, or in the absence of a Will, intestacy legislation.

Property Disputes

Disputes regarding property often arise where a property is solely owned by one cohabitant or a former cohabitant, or the division of the equity of the property is disputed.

There are three main types of applications that can be made under TOLATA to resolve the disputes, namely:

1. The Order of the sale of a property, enabling the release of a party’s financial interest
2. The Court to determine who is entitled to occupy the property
3. The Court to determine the extent of a party’s ownership and nature of that ownership.

Express Declarations of Trust

An express Declaration of Trust is a written document setting out who owns what shares in a property. The terms of the Declaration of Trust can also specify other matters in relation to the property, for example, who is responsible for the day to day costs of the property, such as mortgage repayments, renovations and utility bills, who is entitled to occupy the property and the terms of sale for the property.

An express Declaration of Trust is conclusive as to the demonstration of the party’s intentions of how the property’s ownership should be held. The parties will be held to that Declaration of Trust unless a successful claim is made to rescind or rectify the Trust Declaration.

If a party wishes to challenge an express Declaration, they can only legitimately do so by establishing common mistake, undue influence, or fraud and that will generally be a difficult thing to do.

Types of Trusts

In the absence of an express Declaration of Trust, where a cohabitant wishes to claim a beneficial interest in a property, they must establish one of the following:

1. Resulting Trust

That they contributed in monies or monies worth to the purchase of the property, and that there was a common intention for them to hold the beneficial interest in the property in proportion to those contributions.

2. Constructive Trust

That they can show there was a common intention that they should have a beneficial interest in the property, and that they have acted to their detriment on that basis (for example, by making financial contributions).

3. Proprietary Estoppel

That the legal owner has lead them, either by words or their conduct, to believe that they have a beneficial interest in the property and as a consequence they have acted to their detriment, making it unreasonable for the legal owner to insist that they have total beneficial ownership of the property.

Alternative Dispute Resolution (ADR)

Before considering a Court application, you will usually be encouraged to consider alternative methods to reach an agreement, often to referred to as non-Court Dispute Resolution, which can often be a more timely and cost effective route.

Wilson Browne Solicitors will be able to discuss the suitability of this with you and make recommendations as to what may be best for your circumstances.

Before commencing a claim under TOLATA 1996, it is a requirement that sufficient information has been exchanged so that both parties can understand each other’s position and decide whether it is possible to reach a settlement or how to otherwise proceed.

Court Procedure

If an agreement cannot be reached, a Court application may be required.

Once proceedings are issued, the procedure thereafter consists of 3 main stages: Disclosure, Inspection and Evidence.

The Court will manage the process throughout and will list a Trial (where all the written and oral evidence is considered) if the case does not settle in the early stages.

Family and Property Law Experts

At Wilson Browne Solicitors, we have expertise in property and family law matters, and can be there for you every step of the way helping you with negotiations and the applications you may need to make to Court if necessary.

Our offices in Corby, Higham Ferrers and Rushden, Kettering, Leicester, Northampton and Wellingborough allow us to offer a face to face meeting at a location near you.