When two or more people have an interest in the same property, disagreements can arise over who owns it, how much each person is entitled to or whether the property should be sold.
These situations are particularly common when unmarried couples separate, but they can also affect family members, friends and business partners who have purchased or invested in property together.
At AFG Law, our Dispute Resolution team advises clients dealing with disputes over property ownership, including disagreements about ownership shares and the sale of jointly owned property.
One legal route for resolving these disputes is a TOLATA claim. But what does this involve, who can make a claim and what can the court decide?
What does TOLATA mean?
TOLATA stands for the Trusts of Land and Appointment of Trustees Act 1996. The Act provides a legal basis for resolving disputes involving property held on trust. In particular, it allows the court to determine a person’s interest in a property and make orders concerning how that property should be dealt with.
Under section 14 of the Trusts of Land and Appointment of Trustees Act 1996, a trustee or someone with an interest in property subject to a trust of land can apply to the court for an order.
The court can determine the nature or extent of someone’s ownership interest or make orders relating to the trustees’ functions, which may include requiring a property to be sold.
Although TOLATA is frequently associated with relationship breakdowns, it is not exclusively a family law matter. It can apply to a much wider range of property ownership arrangements.
What is a beneficial interest in a property?
Understanding the difference between legal and beneficial ownership is central to many TOLATA claims. Legal ownership refers to the person or people registered as the property’s owners at HM Land Registry.
A beneficial interest in the property concerns who is entitled to benefit from its value, including the proceeds if it is sold.
For example, two people may be registered as joint legal owners, but disagree about their respective ownership shares. Alternatively, a property may be registered in one person’s name, while another person claims they have a beneficial interest because of an agreement or their contributions towards the purchase.
The legal title does not always provide a complete answer to who is entitled to the property’s value.
However, simply contributing money towards household expenses or living in a property does not automatically establish a beneficial interest. The circumstances, agreements and evidence must be considered.
When might someone bring a TOLATA claim?
TOLATA claims can arise in several situations.
Unmarried couples separating
One of the most common examples involves unmarried couples who have lived together in a jointly owned property.
If the relationship ends, one person may want to sell while the other wishes to remain in the home. They may also disagree about how the proceeds should be divided.
Unlike married couples resolving financial matters on divorce, unmarried partners do not have the same range of financial remedies under family law.
A TOLATA claim may therefore be necessary to establish ownership rights or resolve disagreements about the property.
Property registered in one person’s name
A person may claim an interest in a property even though their name does not appear on the title deeds. For example, they may have contributed towards the deposit or mortgage on the understanding that they would share ownership.
Whether this creates a beneficial interest depends on the evidence and the legal principles applicable to the arrangement.
Disputes between relatives or business partners
TOLATA can also apply where siblings inherit or purchase property together, parents contribute towards a child’s property purchase, or business partners jointly own premises.
Disagreements may arise about whether contributions were gifts or investments, who is entitled to the proceeds or whether the property should be retained.
Our property dispute solicitors can advise on the available options where joint ownership arrangements break down.
Can a TOLATA claim force the sale of a property?
Yes. One of the most common reasons for bringing a TOLATA claim is to ask the court to order the sale of a property. This may happen where one owner wants to sell but another refuses to cooperate.
Under section 14 of the Act, the court can make orders concerning property held on trust. However, an order for sale is not automatic.
When considering an application, the court must take account of relevant factors under section 15 of TOLATA, including:
- The intentions of the people who created the trust
- The purpose for which the property is held
- The welfare of any child occupying, or reasonably expected to occupy, the property as their home
- The interests of secured creditors, such as mortgage lenders
- The circumstances and wishes of relevant beneficiaries
The outcome depends on the particular facts.
For example, the court may approach a dispute involving a family home differently from one involving a property purchased purely as an investment.
How does the court decide who owns what?
Where the parties disagree about their beneficial interests, the court will examine the available evidence. A declaration of trust may clearly establish the parties’ respective shares. Where a valid declaration governs beneficial ownership, it will generally be an important starting point.
If there is no such document, the court may need to consider the parties’ intentions and conduct. Relevant evidence can include purchase documents, mortgage arrangements, bank statements, correspondence and discussions about ownership.
Financial contributions towards the deposit, purchase price or mortgage may be important, but the court does not simply calculate who paid the most and award ownership in those proportions.
The legal approach depends on whether the property is jointly owned or registered in one person’s name, together with the evidence supporting the claimed interest.
This is why obtaining legal advice early can be particularly important where ownership arrangements were never formally recorded.
What evidence do you need for a TOLATA claim?
If you are considering a claim, it is useful to gather documents showing how the property was purchased, funded and managed. These might include the title deeds, any declaration of trust, mortgage statements, bank records, messages discussing ownership and evidence of relevant payments.
Where someone claims a beneficial interest that is disputed, evidence of any agreement or shared understanding can be particularly important.
AFG Law can review the documents and circumstances to assess the potential strength of your position before court proceedings are started.
How do TOLATA proceedings work?
TOLATA proceedings are civil proceedings, usually brought in the County Court, although some cases may be heard in the High Court. Before issuing a claim, it is generally sensible to obtain legal advice, establish what outcome you are seeking and consider whether the dispute can be resolved through correspondence or negotiation.
If proceedings become necessary, the parties will need to present their positions and supporting evidence.
Depending on the issues, the court may be asked to declare the parties’ beneficial interests, determine their respective ownership shares or make an order concerning the property. The process can involve disclosure of documents, witness statements and a final hearing if agreement cannot be reached.
Costs can be significant, particularly where ownership is strongly contested or substantial evidence is required. The usual civil litigation costs principles may apply, meaning an unsuccessful party could be ordered to contribute towards the other party’s legal costs.
Can you resolve a TOLATA dispute without going to court?
Yes. Not every property ownership disagreement requires a court hearing. Alternative dispute resolution, including mediation, can provide an opportunity to reach an agreement without the time, expense and uncertainty of contested litigation.
Possible solutions include one owner buying out the other’s interest, agreeing to sell the property and divide the proceeds, or negotiating arrangements for continued occupation. Where an agreement is reached, it is important to ensure that the terms are properly documented and any necessary property transfer or mortgage arrangements are completed.
AFG Law’s TOLATA solicitors can advise on negotiation and dispute resolution options, as well as the implications of any proposed settlement.
How long does a TOLATA claim take?
There is no fixed timescale for TOLATA claims. A dispute may be resolved relatively quickly if the parties agree on ownership and only need to negotiate the sale.
Where the parties disagree about whether a beneficial interest exists, extensive evidence or a contested court hearing may be necessary. The time required will depend on the complexity of the dispute, the parties’ willingness to negotiate and court availability.
Seeking advice early can help identify the issues that genuinely need resolving and whether proceedings are proportionate.
How can AFG Law help with a TOLATA claim?
Disagreements over property ownership can be financially and emotionally difficult, particularly where the property was once a shared home or represents a substantial investment.
AFG Law’s Dispute Resolution team advises individuals and businesses on property disputes, including disagreements between former partners, relatives and joint owners.
We can review ownership documents, consider evidence of beneficial interests, advise on the prospects of a claim and assist with negotiation or litigation where necessary.
Whether you are trying to establish your share of a property, oppose an application for sale or resolve a dispute with another owner, obtaining advice at an early stage can help you understand your position.
If you need advice about a TOLATA claim, contact AFG Law to discuss your circumstances with our Dispute Resolution team.