TOLATA: Unmarried Couples and their Rights

A Guide to TOLATA and Unmarried Couple Rights

Unmarried couples and the Trust of Land and Appointment of Trustees Act 1996, or TOLATA.

Unlike civil partnerships, none of the rights available to married couples are available by default to unmarried couples, regardless of the length of the relationship and any periods of cohabitation. The ‘common law marriage’ is a myth—unmarried couples do not benefit from the various protections offered by the family court to married couples. At best, they will have claims for maintenance and capital for children (but only during their dependency), and possible claims under the Law of Property Act 1925 if they own property.

Whether the unmarried partner is able to bring a successful claim will depend firstly on the legal ownership of the property and, failing that, on other issues such as establishing the value of contributions by either party that constitute a “common intention to share”.

What is TOLATA?

The Trusts of Land and Appointment of Trustees Act 1996 (known as TOLATA) gives Courts certain powers to resolve disputes about the ownership of property (or land) where there are multiple interested parties. It also has several powers to act on this declaration of interest by way of orders.

Most commonly, TOLATA is enacted when a dispute arises between non-married cohabitees who live in a property that is solely owned or owned through joint tenants/tenants in common.

However, there are more instances where TOLATA can be an effective way to determine whether a party has an interest in a property.

If you believe that you may have a financial interest in a property and you are not being treated fairly or remunerated for your contributions, then you may be able to initiate a TOLATA claim to secure the return of your interest in the property by way of a lump sum payment, obtaining the right to occupy and remain in the property or an order for sale. 

What is a trust?

There are different types of trust that arise over property and to bring a claim you must show that one of these exists. They are as follows: 

  • Express Trust -  Joint Tenants or Tenants in common.
  • Constructive Trust  - if there was an express agreement, understanding or arrangement between the parties that the claimant was to have an interest in the property, then a constructive trust in favour of the claimant will arise.
  • Resulting Trust - may arise solely by operation of law. If the claimant provides the purchase money and the property is registered in the sole name of the defendant, there is a presumption of a resulting trust in favour of the claimant.
  • Estoppel claims – in reliance upon a promise by D, C acts to his detriment.

What are TOLATA claims?

TOLATA claims are claims that determine the ownership of a trust of land that has been under joint ownership or sole ownership. These claims are brought to either a County Court or the High Court and follow Civil Procedure Rules (CPR).

What steps should be taken before issuing an application?

It is usually better to come to a mutually beneficial arrangement for all parties through dispute resolution than allow a TOLATA claim to proceed all the way to court. This way both parties save time, money, and avoid a lot of stress at what is an already stressful time.

Before commencing a TOLATA  claim, sufficient information should be exchanged so that you and the other party can understand each other’s position and decide whether it is possible to reach a settlement or how to otherwise proceed. Your family lawyer will discuss the steps required with you and the action you need to take.

Making a TOLATA claim

Under S14 of TOLATA:

‘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.’

Therefore, if you have cohabited, or otherwise have a financial stake in a property, then you can request the help of the court to resolve your dispute over ownership of the property.

If you are found to be a beneficially interested party whether in equal or unequal shares, the court can use TOLATA to impose a constructive trust on the property to compensate you in one of multiple ways.

For example, this could be through the right to occupy the property, or through an order to sell the property so that you can be compensated through the funds of the sale.

When making a TOLATA claim, it is important that you declare precisely what actions you performed which would entitle you to a share in the property, such as if you financially contributed to its purchase or maintenance.  The property could be held as joint tenants (50:50), tenants in common (50:50 or any other specified division) or in a sole name. How the property is held and registered at the Land Registry will be relevant to the case. 

If you can prove that there was a common intention to share the property and this was either discussed or implied between you and your cohabitor then this is a good start. And if you can also prove that you had been encouraged to perform acts of detrimental reliance (such as giving up your own property to move into the shared property in question or paying some of the mortgage), then this will also weigh the case in your favour in the court.

In short, a TOLATA claim can be issued; 

  • To force the sale of land or property.
  • To reoccupy a former family home when an ex-partner refuses to leave.
  • By parents/grandparents wanting to recover their financial interest in the property. 
  • To determine the share you each own.

There are three main types of applications that can be made under TOLATA to resolve disputes in respect of land. These are;

  • to order a sale of the property, enabling an owner to realise their financial interest,
  • to decide who is entitled to occupy, and 
  • to decide the nature and extent of the ownership of a property owned by two or more people.

It is worth noting that TOLATA claims can be lengthy and costly and therefore early legal advice about the prospects of success and validity of a claim is really important. However, because of the way TOLATA claims are made, the process does allow for early out of court settlements or mediated agreements and it is possible to have these ratified by the court as long as the outcome is fair and agreed between both parties.

Defending a TOLATA claim

The best defence for a TOLATA claim is to prevent one from arising in the first place by taking pre-emptive measures with any cohabitees. To do this you should:

  1. Ensure that you remain consistent with your intentions for your property and, if possible, set these out in writing before you begin cohabiting.
  2. Keep a record of any finances that other parties have contributed into your property and whether these sums were given as a gift or on a transactional basis.
  3. Keep up to date and accurate records of your property and the financial interactions you have about that property. The clearer the accounting and evidence, the easier it is to defend a case.

What is the court procedure?

Once proceedings are issued, the procedure thereafter consists of three main stages: disclosure, inspection and evidence. The court manages the process throughout and will list a trial (where all the written and oral evidence is considered) if the case does not settle. It is always advisable to seek to reach a settlement in most cases.

What are Part 36 offers?

During the course of the proceedings you may be advised to make or respond to a Part 36 offer. This is an offer to reach a settlement, which, if made in accordance with certain rules, carries costs consequences if refused by the party to whom the offer was made, depending on the ultimate outcome of the case. A Part 36 offer will not be shown to the trial judge, but will be disclosed at the end of the trial when the court is asked to consider who should pay the costs of the proceedings. A Part 36 offer is a useful tactical weapon if you want to attempt settlement without potentially compromising your case. 

Other TOLATA uses

TOLATA has other uses beyond settling disputes between unmarried couples, as it can also be used by the court if one party wishes to be removed from a property’s title or mortgage. In this case, one would be giving up interest in the property. TOLATA can also be used to recover a specific sum. This could be useful for you if made a contribution towards the deposit on a property for a family member and then want to recuperate that sum at a later date.

The court also has the authority to enact a habitation order on a property using TOLATA which would entitle a trustee to live at the property either solely or in cohabitation.

If you require advice about TOLATA claims or how to protect assets when considering cohabiting, you should take legal advice from a family lawyer specialising in this complex area. GoodLaw Solicitors LLP have specialists in their team and offers a free 30-minute initial consultation and initial enquiries can contact advice@goodlawsolicitors.co.uk or call on 01273 956270.