TOLATA

A TOLATA claim refers to a legal action under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA). TOLATA applies to the rights of individuals who have a legal interest in property (i.e. they are named on the title deeds as owning the property), but also those who may not have a legal interest (i.e. they are not named on the title deeds as owning the property), but can show they should hold (or be awarded) an interest in the property. It is therefore a useful tool for breaking the deadlock of ownership disputes between co-owners or those who wish to assert a formal interest in a property.

Key Points of a TOLATA Claim

1. Trust of Land: Under TOLATA, a trust is created when a person (the trustee) holds the legal title to a property for the benefit of others (the beneficiaries). These beneficiaries may have a beneficial interest in the property even if they do not hold the legal title.

2. Purpose of the claim for Legal Co-owners: A TOLATA claim arises when there is a dispute about how a property should be owned between co-owners or whether it should be sold. If the property is to be sold, then the claim can determine how the proceeds of the sale should be distributed among the parties who have interests in the property.

3. Rights under TOLATA:

• Beneficiaries can apply to the court for orders related to the property, such as a sale, partition, or determination of how the proceeds of sale should be divided.
• It allows a person with a beneficial interest to seek a declaration about the property or an order for the sale or division of the property.
• It is possible to ask the court to provide an account for sums contributed towards the property, post separation.

4. Examples of the use of TOLATA:

By way of example:

• If two people buy a property together but only one person is listed as the legal owner, the other person may still have a beneficial interest in the property (for example, if they contributed to the purchase or maintenance). If they later disagree about what should happen to the property (whether it should be sold, rented, etc.), the person with the beneficial interest can bring a TOLATA claim to court to assert their rights.
• If two people buy a property together and register their ownership jointly, but later split up and move away from the property to start a fresh life, then one of those owners can ask the court for an order that the property is sold, even if the other owner refuses to sell the property.

What does a solicitor need to assess a TOLATA claim?

A solicitor assessing a TOLATA claim needs to evaluate several factors in order to provide effective legal advice and representation. TOLATA claims typically arise in situations involving disputes over the ownership, use, or sale of property held in trust, often in cases such as cohabitation breakdowns, , or the division of jointly owned assets.

Here is what a solicitor needs to assess:

1. Ownership and Legal Title

• Legal Ownership: Identify who holds the legal title to the property. This can be different to who holds the beneficial ownership.
• Trust Structure: Establish whether the property is held in trust and whether there is an express trust or an implied trust. A solicitor needs to confirm if there are any documents like a deed or agreement that outline the trust.

2. Intention of the Parties

• Express Trusts: If there is an express trust, assess any written agreements, deeds, or declarations of trust that set out the intentions of the parties about the division of interests.
• Implied Trusts: In the case of an implied trust, a solicitor must consider whether there was a resulting trust (where contributions to the purchase price imply beneficial ownership) or a constructive trust (where a party’s actions suggest an ownership interest, e.g., contributions to mortgage payments or improvements).

3. Nature of the Dispute

• Claim for Sale or Division: Determine whether the dispute is about the sale of the property (particularly where one party may not wish to sell), the division of the proceeds, or the allocation of the beneficial interest.
• Occupational Rights: Consider whether any party is seeking to remain in occupation or claiming exclusive possession of the property.

4. Parties Involved

• Beneficiaries or co-owners: Establish who the co-owners or beneficiaries are. The solicitor should determine the role of each party in the dispute and whether their interests are being protected or contested.
• Children or Dependants: Consider if there are any dependents who may be affected by the outcome of the claim, particularly in cases where one party has exclusive occupation. Where there are children then you will likely need the assistance of a family law specialist.

5. Equitable Interests

• Analysis of Beneficial Interests: A solicitor will need to assess the contributions of each party (financial or non-financial) to determine the equitable interests. This can include money contributed to the purchase price, mortgage payments, or home improvements.
• Constructive Trust Claims: If a party is making a claim based on a constructive trust, the solicitor will need to review any evidence of contributions or assurances made by one party to another, such as promises or shared responsibilities regarding the property.

6. Alternative Dispute Resolution (ADR)

• Mediation/Negotiation: Before proceeding with litigation, a solicitor may assess whether the dispute can be resolved through negotiation or alternative dispute resolution (ADR), such as mediation or arbitration.
• Cost Implications: The potential costs of going to court versus resolving the matter amicably should always be at the forefront of all parties’ minds. Court proceedings can be expensive and matters can be protracted if they are disputed in the proceedings.

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