Lauren Preedy – Senior Solicitor – Head of Divorce Team
TOLATA is an abbreviation of Trusts of Land and Appointment of Trustees Act 1996. In short it is the law that is used for property claims between unmarried couples.
Cohabitants do not have the same rights to make property claims as married couples or civil partners.
Disputes can often arise between cohabitants regarding their beneficial interests in property there has been owned by one or both. If the couple had been married or civil partners – the relevant law includes a significant element of discretion and the underlying intention to achieve fairness between the couple.
Property disputes between unmarried couples are decided in accordance with the law of trusts.
There are two main ways in which cohabitants may have an interest in property:
as a joint owner or,
where the property is in the sole ownership of the other cohabitant, under a trust.
If the interest in a property is through a trust it could be what is known as express trust. This is where there is a clearly recorded agreement. But there are also other types of trusts which the court can infer from how a couple have behaved towards each other and the property.
The law under which these cases are decided is the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996).
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when and unmarried couple who live together by a property, it is essential that the professional who represent them on the purchase (solicitor or licensed conveyancer) explains the differences between the ways in which property may be owned and the advantages and disadvantages of each.
If these explanations are not given then there is a potential negligence claim.
There may be a conflict-of-interest between the couple – in which case each should ensure that take independent legal advice.
The basics of Joint ownership
Joint owners may own property as either joint tenants, or tenants in common.
There are significant differences as to the implications of the way in which a jointly owned property is held.
Ian Walker – Solicitor/ Mediator/ Arbitrator/ Managing Director
Between themselves, joint tenants have separate rights and interests, but in relation to third parties they have the characteristics of a single owner.
With a joint tenancy there is the right of survivorship: the interest of one joint tenant will pass automatically to the surviving joint tenant on death.
Tenants in common
Where cohabitants own property as tenants in common, they will hold their interests in distinct shares. For example 50-50 or 70-30.
A tenancy in common may arise on the original transfer or conveyance of the property or where an existing joint tenancy is severed.
The main difference between a joint tenant and a tenant in common is that the tenants in common may dispose of their interest either on death or during their lifetime without affecting the interests of the other co-owners.
Without wanting to be overly technical – tenants in common should enter into a declaration of trust when they purchase a property.
A tenancy in common cannot exist in law, only in equity. It is prudent for tenants in common to enter into a declaration of trust. See also Practice Note: General principles—cohabitation contracts.
Disputes regarding beneficial interests in property often arise where a property is solely owned by one cohabitant.
There are different ways in which the interest in the ownership can arise for the non-owning one of the couple. We won’t go into the detail here – but the person claiming the interest will need to prove their claim. This can be difficult.
These cases can be very fact specific and if you are a separating cohabitant and you think you might or should have an interest in the property then you should seek advice.
Schedule One Children Act 1989
When a cohabiting couple separate it is often the case that they have children.
A parent can make financial claims under what is known as Schedule One of the Children Act 1989. The court can order that one
Kris Seed – Senior Chartered Legal Executive – Head of Private Law Children Team
parent provide money to provide a home for the couples children.
Claims by a former cohabitant can arise at the same time as TOLATA claims. The outcome of a TOLATA claim will have a bearing on the outcome of a Schedule One Children Act Claim. For this reason and to save time and cost the court will normally deal with TOLATA and Schedule One Children Act claims simultaneously.
TOLATA can be quite a niche area of law because it is not strictly what many would consider to be family law. Because of the overlap with the Children Act 1989 it can also be something which non-family lawyers also prefer to avoid.
We are take the view that TOLATA falls within our expertise on the basis that these are disputes between family members – often with children – and therefore the family law approach (which seeks to minimise the fallout of the dispute upon the couples children) is to be preferred.
Within our team our divorce team regularly act for clients in TOLATA cases and have considerable experience.
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