ToLATA or Not ToLATA? That is the question; well it may be for separating unmarried couples seeking to resolve a dispute relating to their land or property. Today, the number of couples who cohabit (i.e. live together but do not marry or enter into a civil partnership) is increasing, with around 25% more people now cohabiting than a decade ago (according to the Office for National Statistics (ONS)) Contrary to popular belief, there is no such thing as a “common law marriage”, so these cases pose a particular challenge when it comes to dividing assets following separation, This is where the Trusts of Land and Appointment of Trustees Act 1996 (‘ToLATA’) comes in. In this article, we will explain the purpose of ToLATA, and why this may provide recourse when determining how property and land should be handled following the separation of an unmarried couple.
What is ToLATA?
In the event of a property or land dispute following the separation of an unmarried couple, a claim can be brought under the Trusts of Land and Appointment of Trustees Act 1996 (ToLATA) to request that the Court make a decision regarding that property.
Under ToLATA, the Court will have the power to make a decision (as it sees fit) on:
- Who owns the property, and how this is shared
- Whether the property or land should be sold
- Who should remain in the property following separation
- Whether parents or grandparents should be able to regain their financial interest in a property.
They cannot, however, remove or appoint trustees.
Before ToLATA, its predecessor, the Law of Property Act 1925 imposed a duty to sell property owned by more than one person in the event of separation. Section 5(1) of TLATA, in contrast, states that there is no duty to sell in such circumstances.
What is a ‘Trust of Land’?
A trust of land can arise in several ways, including:
- expressly in writing
- implied, resulting, or constructive – where the proprietor has acquired the land using funds provided by another
- as a statutory trust – imposed when two or more persons own land jointly
- as a bare trust where the trustee is a nominee for a beneficiary
As such, where a couple have been living together in a property that was purchased by one person partially using the funds of the other person, this would create an implied trust of land. Where property is jointly owned by two people (i.e. co-owners), they are classed as both trustees and beneficiaries. Claims brought under ToLATA can, therefore, be brought by either party as a trustee or beneficiary.
Section 14 of ToLATA states:
“(1)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.
(2)On an application for an order under this section, the Court may make any such order—
(a)relating to the exercise by the trustees of any of their functions (including an order relieving them of any obligation to obtain the consent of, or to consult, any person in connection with the exercise of any of their functions), or
(b)declaring the nature or extent of a person’s interest in property subject to the trust, as the Court thinks fit.
(3)The Court may not, under this section, make any order as to the appointment or removal of trustees.
(4)The powers conferred on the Court by this section are exercisable on an application whether it is made before or after the commencement of this Act”.
How can a family law solicitor help with a ToLATA claim?
It is always advisable to seek advice from a family law Solicitor who deals with ToLATA claims, as this is a specialist area of law. They will be able to explain the best options based on your circumstances and whether making a ToLATA claim is appropriate. Key to this is collating enough evidence that a trust of land exists and who has a beneficial interest. A family law Solicitor will act quickly to protect the interests of their client, especially where they have no legal ownership of the property and their beneficial interest is not protected on the registered title at the Land Registry. Where necessary, an application can be made to the Land Registry to have their beneficial interest noted and place a restriction on the title of the property to prevent the registered owner from selling it.
A family law solicitor can also intervene urgently where one person has been unlawfully excluded from the property by the other party by seeking an interim injunction.
Where possible, offers will be made (a Part 36 Offer) in order to try and reach an agreed conclusion out of court either before ToLATA proceedings are commenced or throughout the course of the proceedings.
Before an individual or their Solicitor can bring a claim under ToLATA at court, they must follow the required pre-action protocol. This includes seeking an Alternative Dispute Resolution (ADR) (e.g. mediation, negotiation, or arbitration) outcome, as well as sending a letter before claim setting out the facts of the dispute, the law and the relief claimed.. If necessary, a claim can then be brought under section 14 of ToLATA before the High, County, or Business and Property Court, depending on which is appropriate. Your Solicitor will also determine whether to follow the part 7 or part 8 procedure – this depends on the extent of the dispute, whether matters of fact are disputed, and the outcome required (e.g. part 8 must be followed if the application is to sell the property in question).
As ToLATA proceedings are must follow the Civil Procedure Rules, the general rule is that the successful party is entitled to recover their costs from the losing party, although what order is made is at the court’s discretion. In deciding what order (if any) to make about costs, the Court will have regard to all the circumstances, including—
a) the conduct of all the parties;
b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
c) any admissible offer to settle made by a party which is drawn to the Court’s attention, and which is not an offer to which costs consequences under Part 36 apply.
If a party brings a ToLATA claim which is unjustifiable, defends a claim or an issue on which they should have conceded, or neglects to make any reasonable offers they could find themselves having to pay their opponent’s legal fees in addition to their own.
It is therefore essential to take advice in respect of the merits of any claim you may bring or have to face defending from a specialist family solicitor.
Bringing a claim under ToLATA to resolve a property ownership dispute following the separation of an unmarried couple requires careful consideration of the possible outcomes, the likelihood of making a successful claim, and the costs (including the costs risk) and timescale involved. An experienced family law Solicitor will listen to the details of your case and explain all aspects of bringing a claim before you make the decision to proceed.
Edwards Family Law is a niche London-based firm specialising in high-net-worth divorce and international family law. To find out more about bringing a claim under ToLATA, please phone +44 (0)20 7129 7978 or email firstname.lastname@example.org. All enquiries are treated in the strictest confidence.