An Introduction to the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA)
Jan Samuel 14-06-2022
TOLATA, or the Trusts of Land and Appointment of Trustees Act 1996, is an Act created on the recommendation of the Law Commission, to take the place of previous, outmoded legislation.
The Act, which is in place to protect cohabitees and settle property ownership disputes when a relationship ends, is useful in a number of situations, including disputes regarding whether a property should be sold, disputes about the beneficial shares of a property, and disputes which arise from the joint purchase of a property. Effectively, TOLATA enables both parties to protect and recover their interest in the property, whether they are named on the title deeds, or not.
Where there is a dispute relating to a trust of land, sections 14 and 15 of the Act are triggered.
TOLATA can establish whether someone has an interest in a property they have shared, where only the other party’s name is on the deeds, and the extent of such an interest.
TOLATA disputes might come about under a diverse range of circumstances, for example:
- One partner may wish to force the sale of the property in order to recover their financial interest, while the other wishes to continue living in the property with dependent children.
- One partner may be named exclusively on the deeds, but the other may feel their contributions to the upkeep of the property and to household bills mean they have an interest.
- In other cases, a creditor may be seeking to repossess the property.
Where co-owners of a property separate, TOLATA enables the court to determine the nature and extent of each party’s interest in the property. At the end of a relationship, one party often moves out and, at some point, wishes for the property to be sold so the equity can be divided according to the parties’ respective interests. An application can be made under Section 14 of TOLATA. The court will, when considering the application, take the matters listed in Section 15 into account, along with any other matters they consider pertinent.
The considerations in section 15 are listed without any weighting in terms of importance, so the court has the scope to deal with each case on its unique circumstances. The factors listed include:
- the welfare of any resident children
- the interests of secured creditors
- the intention(s) of the parties, and
- the purpose(s) of the trust of land
Generally, in cases where property is held in joint names, the law assumes that it is held in equal proportions of 50:50, unless there is an express agreement in place showing that the shares are different. However, in situations where no written agreement exists, and one party is making a claim that they have made a substantial contribution to the purchase price or the upkeep of the property, the court will need to determine, on evidence, the validity of that claim, and the extent of each party’s interest.
The leading cases in this area are Stack v Dowden, where the House of Lords established key principles for determining the respective beneficial interests of cohabitants, and Jones v Kernott, where the Supreme Court upheld that if a property is purchased in joint names, there is a presumption that their beneficial interests in the property coincide with their legal estate.
In a TOLATA claim, the courts consider a number of factors, such as resulting trusts (based on the non-owner contributing to the purchase price), constructive trusts (rooted in shared ownership, or in financial contributions), and proprietary estoppel (where one party has relied on assurances of shared ownership, acting to their detriment as a result).
The situations that lead to a claim under TOLATA can be complex.
Whether you are bringing a claim or defending it, the team at Samuels can lead you through the process, ensuring you put forward the strongest possible case. Contact us to find out how we can help.
Article credit: Lalla Merlin