The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) is used by the courts to determine ownership of a property where there are multiple interested parties. It also has several powers to act on this declaration of interest by way of orders.
Most commonly, TOLATA is enacted when a dispute arises between non-married cohabitees who live in a property that is solely owned or owned through joint tenants/tenants in common.
However, there are more instances where TOLATA can be an effective way to determine whether a party has an interest in a property.
If you believe that you may have a beneficial interest in a property from which you are not being treated fairly or remunerated for your contributions, then you may be able to initiate a TOLATA claim to secure the return of your financial interest in the property by way of a lump sum payment or the right to occupy.
What are TOLATA claims?
TOLATA claims are claims that determine the ownership of a trust of land that has been under joint ownership or sole ownership.
These claims are brought to either a County Court or the High Court and follow Civil Procedure Rules (CPR).
It is usually better to come to a mutually beneficial arrangement for all parties through dispute resolution than allow a TOLATA claim to proceed all the way to court. This way both parties save time, money, and avoid a lot of stress at what is an already stressful time.
Making a TOLATA claim
Under S14 of TOLATA:
‘Any person who is a trustee of land or has an interest in property subject to a trust of land may make an application to the court for an order under this section.’
Therefore, if you have cohabited, or otherwise have a financial stake in a property, then you can request the help of the court to resolve your dispute over ownership of the property.
If you are found to be a beneficially interested party whether in equal or unequal shares, the court can use TOLATA to impose a constructive trust on the property to compensate you in one of multiple ways.
For example, this could be through the right to occupy the property, or through an order to sell the property so that you can be compensated through the funds of the sale.
When making a TOLATA claim, it is important that you declare precisely what actions you performed which would entitle you to a stake in the property, such as if you financially contributed to its acquisition or maintenance.
If you can prove that there was a common intention to share the property and this was either discussed or implied between you and your cohabitor then this is a good start. And if you can also prove that you had been encouraged to perform acts of detrimental reliance (such as giving up your own property to move into the shared property in question), then this will also weigh the case in your favour in the court.
TOLATA for non-married cohabitees
Non-married cohabitees do not have the same rights that married couples or those in civil partnerships have where property is concerned.
Therefore, when non-married cohabitees separate without having a non-marital cohabitation agreement in place, issues can arise if their cohabited property was either solely owned or owned through tenants in common.
TOLATA can be used in this instance to form a trust on the property and determine who has proprietary rights or what the split in ownership is between the two parties.
If needed, it can also be used to make an order on what happens to the property through account or compensatory orders. However, with the way TOLATA claims are made, the process allows for out of court settlements to be decided so the outcome is fair, if it is in the best interests of any children in the relationship and if both parties are in agreement.
Other TOLATA uses
TOLATA has other uses beyond settling disputes between unmarried couples, as it can also be used by the court if one party wishes to be removed from a property’s title or mortgage. In this case, one would be giving up interest in the property.
Or TOLATA can be used to recover a specific sum. This could be useful for you if made a contribution towards the deposit on a property for a family member and then want to recuperate that sum at a later date.
The court also has the authority to enact a habitation order on a property using TOLATA which would entitle a trustee to live at the property either solely or in cohabitation.
Defending a TOLATA claim
The best defence for a TOLATA claim is to prevent one arising in the first place by taking pre-emptive measures with any cohabitees.
Ensure that you remain consistent with your intentions for your property and, if possible, set these out in writing before you begin cohabiting.
Keep a record of any finances that other parties have contributed into your property and whether these sums were given as a gift or on a transactional basis.
An up to date and accurate record of your property details can help to make defending a TOLATA claim easier and make your case more appealing to a judge should you unfortunately need to go to court.
What is a trust of land?
A trust of property can come in multiple forms: express, implied, resulting, or constructive. In a trust, one party is known as a trustor who then looks after the property on behalf of other trustees.
Usually, the trustor is the party who owns the majority share of the property in a joint tenancy or tenancy in common.
Through TOLATA, the court can implement a trust such as a constructive trust, which would be the case if there was no previous declaration of trust.
Family and property law experts
At Brown Turner Ross, we can support you in all forms of dispute resolution and are experts when it comes to both property and family law which are frequently relevant in TOLATA cases.
Get in touch with our solicitors for advice and help securing a fair outcome for your property dispute that compensates you appropriately for your efforts.