TOLATA claims

Our TOLATA claim solicitors act for co-owners across England and Wales when relationships, families or business arrangements break down and a jointly owned property is in dispute. The team is led by partner Shilpa Mathuradas and ranked by Chambers UK and the Legal 500 for property litigation.

When two or more people own a property together and fall out, the law that governs how the dispute is resolved is the Trusts of Land and Appointment of Trustees Act 1996 (often shortened to TOLATA, or sometimes TLATA). It gives the court the power to decide what should happen to the property, how the proceeds of sale should be divided, and whether someone who is not named on the legal title has a beneficial interest in it. TOLATA sits alongside our wider work on joint ownership disputes.

Most of our TOLATA cases involve cohabiting couples who have separated. We also act for siblings disputing an inherited property, parents and adult children who bought together, and friends or business partners who own an investment property jointly. The principles are the same. The personal circumstances are not.

What is a TOLATA claim?

A TOLATA claim is a civil court application brought under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. It asks the court to make an order about a jointly owned property.

In practice, a TOLATA application is used to do one or more of three things:

• Decide whether the property should be sold, and on what terms.
• Decide the size of each co-owner’s share (their beneficial interest).
• Decide whether someone whose name is not on the title still has a share in the property.

The court can also make orders about who is allowed to live in the property in the meantime, and whether one co-owner should pay the other a sum to reflect their exclusive use of it (sometimes called occupation rent).

Who can bring a TOLATA claim?

Anyone with an interest in a jointly owned property can apply. That includes:

• Co-owners named on the legal title at HM Land Registry.
• Cohabiting partners who contributed financially but were not added to the title.
• Family members who put money towards a property held in someone else’s name.
• Trustees of land.
• Secured creditors of a co-owner, such as a lender holding a charge over one party’s share.

Unmarried couples rely heavily on TOLATA. Unlike divorcing spouses or civil partners, cohabitants have no automatic right to a share of property held in the other party’s sole name and no equivalent of a financial settlement on separation. Property disputes between unmarried couples are therefore decided under trust law, not family law.

Common reasons a TOLATA dispute arises

The trigger is almost always a change in circumstances. A relationship ends. A parent and adult child fall out. A sibling who inherited a share wants to release the money. An investment partner wants out. The typical issues we see are:

• One co-owner wants to sell and the other does not.
• The parties disagree about how the proceeds of sale should be split.
• One party paid more towards the deposit, mortgage or improvements and wants that recognised.
• One party is not on the title but says they have a beneficial interest based on contributions or assurances.
• A declaration of trust exists but one party now disputes it.
• One co-owner has been living in the property rent free while the other has been excluded.

If you have separated and the property is in your former partner’s sole name, take advice early. Beneficial interest claims turn on evidence of intention and contributions, and that evidence is easier to gather close to the events.

Section 14 of TOLATA: what the court can order

Section 14 gives the court a wide power to make orders about how trustees of land exercise their functions, and to declare the nature or extent of any person’s interest in the property. In a typical TOLATA case the court is being asked to:

• Order the sale of the property and the division of the net proceeds.
• Declare each co-owner’s beneficial share.
• Declare that someone not on the legal title holds a beneficial interest.
• Regulate occupation of the property pending sale.
• Order payment of occupation rent where appropriate.

The court has a wide discretion. It can decline to order a sale, it can postpone a sale, and it can attach conditions. What it cannot do under section 14 is appoint or remove trustees.

Section 15: the factors the court considers

Section 15 of TOLATA sets out the matters the court must consider when deciding a section 14 application. They are:

• The intentions of the person or people who created the trust.
• The purposes for which the property is held.
• The welfare of any minor who occupies, or might reasonably be expected to occupy, the property as their home.
• The interests of any secured creditor of a beneficiary.

Where children live in the property, their welfare is a significant factor and the court will think carefully before ordering an immediate sale. Where a secured lender is pressing for sale to enforce its charge, the creditor’s interests are often given particular weight. The balancing exercise is fact specific.

Implied and constructive trusts

You do not need to be named on the legal title to have an interest in a property. The court can recognise a beneficial interest through a resulting trust or a constructive trust.

A resulting trust can arise where you contributed to the purchase price but the property was put in someone else’s sole name. Your contribution is presumed to give you a proportionate share.

A constructive trust arises where there was a common intention that you would have a share in the property, and you acted on that intention to your detriment. Common intention can be express, for example through conversations between the parties, or inferred from how the parties managed the property and their finances. Detriment can include paying towards the mortgage, paying for substantial improvements, or giving up your own home or career to move into the property.

Beneficial interest claims of this kind are evidence heavy. Bank statements, conveyancing files, text messages, witness statements and contemporaneous notes all matter.

Defending a TOLATA claim

If a TOLATA claim has been brought against you, the position is not hopeless. There are several lines of defence and we regularly act for defendants as well as claimants.

Common defences include:

• Disputing the existence or scope of any common intention to share the property.
• Disputing whether the claimant acted to their detriment in reliance on any assurance.
• Arguing that contributions to the property were gifts or rent, not investments.
• Arguing that an existing declaration of trust is binding and the claimant’s case is precluded by it.
• Arguing that the court should refuse or postpone an order for sale on section 15 grounds, for example because a child lives in the property.

The right strategy depends on the facts. Early legal advice is important: an early without prejudice offer or mediation proposal can change the costs picture significantly.

How a TOLATA claim works

Most TOLATA claims do not reach a final hearing. The typical process looks like this:

1. Initial advice and evidence review. We take a full picture of the title position, contributions, conversations and conduct, and advise on the likely outcome.
2. Pre action correspondence. We write to the other side setting out your position, the share you are seeking and what you would accept by way of settlement.
3. Alternative dispute resolution. We strongly encourage mediation or a round table meeting. Courts expect parties to try to settle before issuing proceedings. Settlement at this stage is faster, cheaper and gives the parties more control over the outcome.
4. Issuing proceedings. If settlement is not possible, we issue a Part 8 or Part 7 claim in the County Court or High Court depending on the value and complexity.
5. Case management and disclosure. The court will set a timetable for evidence and disclosure.
6. Mediation or further negotiation. Most claims settle at this stage once the evidence is on the table.
7. Trial. If the case does not settle, the court will hear the evidence and decide.

Throughout the process we will keep you informed about the merits of your case, the likely costs and the risk of an adverse costs order if you press on with a weak position.

How much does a TOLATA claim cost?

The honest answer is that costs depend on how strongly the case is contested. The main components are:

• Court fees. The issue fee depends on the value of the claim. A claim seeking a declaration plus an order for sale will usually attract the relevant Part 7 fee scale.
• Solicitor fees. Charged on an hourly basis. Straightforward cases that settle through correspondence or mediation cost significantly less than fully contested proceedings.
• Barrister fees. Specialist counsel is often instructed for advice at key stages and at any contested hearing.
• Expert fees. Valuation evidence may be needed.

In most cases, the losing party is ordered to pay a proportion of the winner’s costs. That can be a significant exposure, which is why early advice on the strength of the case matters.

Mediation is almost always cheaper than fighting through to trial, and it lets the parties craft outcomes the court cannot order, such as one co-owner keeping the property and paying the other a lump sum (as happened in the case study below).

Time limits for a TOLATA claim

There is no fixed limitation period for a section 14 application itself, but the underlying claims that are wrapped into a TOLATA application can be time barred. Claims to recover trust property or proceeds, and claims for breach of trust, are governed by section 21 of the Limitation Act 1980. Beneficial interest claims based on a constructive trust are generally not time limited in the same way, but delay can still harm your case through loss of evidence and the doctrine of laches.

If you have separated, or if a co-owner has died and you believe you have an interest in the property, get advice promptly.

TOLATA case examples

£400,000 balancing payment after a long term cohabiting relationship. Our client and her former partner had cohabited since the early 1980s and owned two properties together: the family home worth £1.6 million held as joint tenants, and a holiday let worth £725,000 held as tenants in common. After the relationship ended, her former partner refused an equal split and claimed additional credit for improvements and for building up the holiday let as a business. We initially sought settlement on the basis of sale and equal division. When that was rejected we issued TOLATA proceedings and ultimately settled at mediation, with our client receiving a balancing payment of £400,000 and the parties closing their joint accounts. Read the TOLATA proceedings case study.

Mother and daughter dispute resolved at mediation. A mother and daughter disagreed about beneficial ownership of two properties. A declaration of trust said the daughter owned 99% of one property, which the mother disputed. The daughter said she had a 61.5% share of the second property based on her deposit and mortgage contributions. We were instructed mid-case when their original solicitor fell ill. We applied for a stay of proceedings to pursue mediation and reached a clean break settlement in which each party took sole ownership of one property, with a balancing lump sum. Read the TOLATA mediation case study.

Why choose Osbornes for a TOLATA claim

Property litigation is its own discipline and our team of specialist lawyers is built for it. Shilpa Mathuradas leads the department and is recognised by Chambers UK and the Legal 500 for property litigation. She is regularly instructed in contested TOLATA claims involving cohabiting couples, family disputes and high value beneficial interest claims.

We are pragmatic about settlement. Most TOLATA disputes are better resolved by negotiation or mediation than by trial, and we will tell you when that is the case. We are equally willing to fight a case in court when the other side will not engage.

Where a TOLATA dispute overlaps with family law, we work alongside our family team on issues such as Schedule 1 Children Act 1989 claims, cohabitation agreements and Inheritance Act claims, so you do not have to repeat your story to two firms. Where a co-owner has died and the estate is being administered, we work with our contentious probate team.

Speak to a TOLATA solicitor today

Call us on 020 7485 8811 or fill in the contact form below. We will arrange a call to talk through your situation and the options open to you.