TOLATA Claims: Resolving Disputes Over Jointly Owned Property

TOLATA is short for the Trusts of Land and Appointment of Trustees Act 1996. It is the law most often used in England and Wales to resolve disputes about property owned by more than one person, or where someone says they have a share in a property that is in another person’s name.

That may sound technical, but the situations are very ordinary:

• an unmarried couple separate and cannot agree what happens to the house;
• brothers and sisters inherit a property together and one wants to sell while another wants to keep it;
• friends or relatives bought a home together and one now wants their money out;
• a partner has paid towards a home that is in the other partner’s sole name and believes they own part of it;
• parents helped with a deposit and want to know whether that money is protected.

Whenever land or a home is owned by two or more people, the law treats it as held “on trust”. TOLATA sets out how that trust works and gives the court power to settle disagreements about it.

When people buy a property together, they own it in one of two ways, and the difference matters a great deal.

• Joint tenants own the whole property together, without separate shares. If one dies, the other automatically inherits it, whatever the deceased person’s will says. This is called survivorship.
• Tenants in common each own a distinct share, which can be equal or unequal, for example 50/50 or 70/30. Each person’s share passes under their will, or under the intestacy rules if they have no will.

If you own as joint tenants and your relationship has broken down, you may want to “sever” the joint tenancy so that you become tenants in common. This is usually done by giving the other owner notice in writing, and it is normally sensible to record the change at HM Land Registry too. Severance does not decide the size of each share, but it does stop your share passing automatically to the other owner if you die. It is often one of the first things we discuss with a client after a separation.

A declaration of trust is a written document setting out who owns what share of a property. It may be in the transfer deed signed when you bought, or in a separate deed made at the time or later. It can also cover practical points, such as what happens if one person wants to sell or how a deposit should be repaid.

Where there is a clear, valid written declaration of the shares, the court will generally hold the owners to it, unless there was something like fraud or a mistake. That is why disputes are far simpler, quicker and cheaper where a declaration exists.

If you are buying with a partner, friend or relative, especially where you are putting in different amounts, a declaration of trust is one of the best investments you can make. Our article on why you need a cohabitation agreement explains how the two documents work together.

TOLATA disputes most often arise when unmarried couples separate. Unlike married couples and civil partners, cohabitants do not have the family court’s wide powers to divide property on the basis of what is fair. There is no such thing as “common law marriage” in England and Wales. The question is not what is fair, but who owns the property, and in what shares, under property and trust law.

In broad terms:

• Home in joint names, with no declaration of shares: the starting point is that you own it equally. A partner who says the shares should be unequal must show that was what you both intended, looking at the whole course of dealing between you.
• Home in one partner’s sole name: the starting point is that the legal owner owns all of it. The other partner can still claim a share, but must show there was a shared intention that they would have one and that they relied on it to their detriment. Direct contributions to the purchase price or mortgage are often important evidence. Paying household bills or doing work around the home may not be enough on its own.

These principles come from leading court decisions and they depend heavily on the facts and the evidence. If you are separating, our family law team can also advise on related issues, such as arrangements for children. You may find our article on whether common law marriage exists in the UK helpful too.

Section 14 of TOLATA allows a trustee (usually a legal owner) or anyone with an interest in the property to apply to the court. The court can make a range of orders, including:

• a declaration of each person’s share of the property;
• an order for sale, so the property is sold and the proceeds divided;
• an order postponing a sale, for example until a set date;
• orders about occupation, such as who may live in the property and on what terms, including payments to an owner who has been excluded.

When deciding whether to order a sale, the court must consider the factors set out in section 15 of the Act, including the intentions of the people who created the trust, the purposes for which the property is held, the welfare of any child under 18 who lives there or might reasonably be expected to, and the interests of any secured creditor such as a mortgage lender. The court can also take account of mortgage payments, improvements and occupation since the separation when working out what each person should receive.

Most disputes are settled without a final court hearing, and the courts expect you to try. A typical case might involve:

• Gathering the evidence: the title documents, any declaration of trust, purchase and mortgage records, bank statements and messages showing what was said and intended.
• A letter of claim: setting out what you say and inviting a response, in line with the rules on conduct before court proceedings.
• Negotiation or mediation: often the quickest and least expensive way to agree who keeps the home, whether one person buys the other out, or how the sale proceeds are divided.
• Court proceedings, if needed: a claim is issued, usually in the County Court, followed by statements, disclosure of documents and, if no settlement is reached, a final hearing.

One important point: TOLATA claims are civil claims, not family proceedings. The general rule is that the losing party may be ordered to pay a large part of the winner’s legal costs. That makes early, realistic advice and sensible offers to settle particularly valuable.

You cannot simply sell a jointly owned property without the other owner’s agreement, because all the legal owners must sign the transfer. If the other owner will not agree, you can ask the court to order a sale under TOLATA. Orders for sale are commonly made where the relationship has ended and there is no good reason to keep the property, but the court weighs up all the circumstances, including any children living there, so there is no guarantee.

In practice, the possibility of an application often helps the parties reach an agreement, such as a buy out at an agreed value or a sale with an agreed division of the proceeds.

Possibly. Being left off the title does not always mean you have no interest. If you can show that you and your partner shared an intention that you would have a share, for example from conversations about owning the home together, and you acted on that, such as by paying towards the deposit or the mortgage, you may have a claim. How big a share depends on the whole history of your relationship with the property.

These cases turn on detailed evidence, so it is worth speaking to us early and keeping any messages, emails or bank records that show what was agreed and who paid what. If you have contributed to a property and are worried about protecting your position, you may be able to register a notice or restriction at HM Land Registry. Our team also deals with related Land Registry adjudication matters.

Prevention is far easier than a dispute. If you are buying with someone you are not married to, consider:

• deciding whether to own as joint tenants or tenants in common, and recording the shares in a declaration of trust;
• making a cohabitation agreement that covers what happens to the home and other assets if you separate (our prenuptial and cohabitation agreements page explains more);
• keeping records of who paid the deposit and other significant sums;
• making a will, so your share goes where you intend.

If you have already separated, early advice and a calm approach, often including mediation, usually leads to a quicker and less expensive outcome than going straight to court.

Disputes over a home are stressful, especially when they involve a former partner or family member. Our litigation team helps people across Scunthorpe, Goole and North Lincolnshire to understand where they stand and to resolve property disputes as sensibly as possible. Liam Lawrence handles disputes like these, supported by Megan Cave, a paralegal in our civil litigation department.

We give you an honest view of the strengths and weaknesses of your position, explain the likely costs in plain English, and aim to settle matters through negotiation or mediation wherever we can. If court proceedings are needed, we will guide you through each stage. Whether you are trying to recover your share, protect your home, or simply want to know your options after a separation, call us for a free, no obligation initial chat.