TOLATA property disputes: ownership, occupation and sale

TOLATA stands for the Trusts of Land and Appointment of Trustees Act 1996.

Under section 14, a trustee or person with an interest in property subject to a trust of land may ask the court to determine questions concerning that property.

This can include disputes between:

• former cohabiting partners;
• unmarried joint owners;
• relatives who own property together;
• friends or business partners;
• legal owners and people claiming a beneficial interest; and
• beneficiaries or trustees of property.

There is no general legal status of “common-law spouse” giving cohabitants the same financial claims as married couples.

Depending on the claim, the court may be asked to:

• declare the parties’ beneficial shares;
• determine whether a beneficial interest exists;
• order the property to be sold;
• postpone or regulate a sale;
• determine how trustees should exercise their powers;
• address rights of occupation; or
• give consequential directions concerning the property or proceeds of sale.

The court does not simply redistribute property according to what it considers generally fair, as it may in financial remedy proceedings following divorce.

Legal ownership is shown on the registered title, but beneficial ownership concerns who is entitled to the property’s value.

Important documents may include:

• the Land Registry title;
• transfer documents;
• Form TR1;
• any declaration of trust;
• the purchase file;
• mortgage documents;
• evidence of the deposit;
• written agreements;
• correspondence between the parties; and
• records of relevant financial contributions.

An express declaration of trust can be highly significant. Claims that the beneficial ownership differs from the formal documentation require careful legal analysis.

A person may argue that an interest arose through:

• an express declaration of trust;
• a resulting trust;
• a common-intention constructive trust; or
• proprietary estoppel.

These legal doctrines have different requirements. Paying household expenses, living in the property or believing an outcome would be fair does not automatically establish a particular beneficial share.

Independent legal advice should be obtained where ownership is disputed.

When considering an application under section 14, section 15 requires the court to consider matters including:

• the intentions of the person or people who created the trust;
• the purposes for which the property is held;
• the welfare of any child who occupies, or might reasonably be expected to occupy, the property as their home; and
• the interests of secured creditors.

The presence of a child can therefore be relevant, but it does not automatically prevent a sale or give the court the wider redistributive powers available on divorce.

A separate Schedule 1 Children Act application may need to be considered where financial provision for a child is sought.

Depending on the issues, relevant evidence may include:

• title and conveyancing documents;
• declarations of trust;
• deposit contributions;
• mortgage payments;
• renovation or improvement costs;
• contemporaneous messages and emails;
• discussions about ownership;
• financial statements;
• loan or gift evidence;
• wills or estate documents;
• property valuations;
• evidence of occupation; and
• documents showing the purpose for which the property was acquired.

Evidence should be assessed by relevance and legal significance rather than simply totalled as a list of expenditure.

Before issuing a claim, the parties should normally consider:

• exchanging relevant documents;
• obtaining an up-to-date valuation;
• identifying the legal and beneficial ownership positions;
• setting out the proposed resolution in writing;
• negotiation;
• mediation or another form of alternative dispute resolution; and
• sending a properly reasoned pre-action letter.

Failure to engage reasonably before proceedings may affect the eventual costs order.

TOLATA proceedings are civil proceedings, normally dealt with in the County Court.

The correct procedure will depend on the relief sought and whether there is a substantial factual dispute. Not every TOLATA claim should automatically be issued using the same civil procedure.

Unlike many family proceedings, the general civil rule is that an unsuccessful party may be ordered to pay the successful party’s legal costs. The court retains discretion and considers the parties’ conduct, success on individual issues and offers to settle.

A person should understand the potential costs exposure before issuing or defending a claim.

• assuming cohabitation creates the same rights as marriage;
• relying on fairness without identifying the legal basis of the claim;
• ignoring an express declaration of trust;
• treating every payment as proof of ownership;
• failing to preserve messages and purchase documents;
• issuing before identifying the remedy required;
• confusing legal ownership with beneficial ownership;
• overlooking the mortgage lender’s position;
• failing to obtain a current valuation;
• ignoring pre-action requirements or settlement proposals;
• failing to consider Schedule 1 where children’s provision is the real issue; and
• starting proceedings without understanding the civil-costs risk.

Price Family Law can provide practical support with:

• an initial Strategic Case Review;
• organising the title, purchase and trust documentation;
• preparing a chronology;
• analysing the available evidence;
• preparing a schedule of financial contributions;
• identifying factual and evidential gaps;
• preparing instructions for independent legal advice;
• preparing a structured pre-action chronology or response;
• analysing settlement proposals;
• preparing witness statements and hearing documents;
• organising disclosure and the court bundle; and
• preparing the client to conduct their case.

Because TOLATA involves complex property law and civil-costs exposure, specialist advice from a regulated solicitor or barrister may be recommended.

For a disputed TOLATA matter, the recommended starting point will usually be a £495 Strategic Case Review.

This allows the documents, legal ownership position, evidence and realistic options to be assessed before wider work is quoted.

Further support may be available under a separately agreed fixed-fee scope. Court fees, solicitor or barrister fees, valuation fees, expert fees and other third-party costs are not included unless expressly stated.