ToLATA:
The Trusts of Land and Appointment of Trustees Act 1996.
Following a divorce, there is provision for the division of matrimonial assets, but what happens in the case of cohabiting, or once cohabiting, couples?
There are two main categories of Application that can be made under this Act:
- To decide who is entitled to occupy the property and
- To decide the ownership as between the two parties - where the property is owned by at least two people.
These Applications entitle a Court to decide who are the legal and beneficial owners of the property and in what shares.
A ToLATA case generally involves cohabitees. Unlike in divorce, this Act looks at the intention of the parties, rather than looking at what is ‘fair.’ The person who is not the legal owner is under an onus to prove their case ‘on the balance of probabilities.’
The following factors might be helpful to consider:
- If there is an express Declaration of Trust, that is usually binding upon the parties;
- Often there are disputes as to whether, on the breakdown of the relationship, the property ought to be sold;
- In order to infer a Trust between the parties, one should look for common intention; detrimental reliance and unconscionable denial of rights.
This is a particularly complex area of law, mainly because the Act is not distinct in its guide as to what to rely upon to substantiate a claim. It can also be an all or nothing case, with serious consequences on costs if not handled correctly.
What does ToLATA stand for?
This refers to The Trusts of Land and Appointment of Trustees Act 1996 giving Courts certain powers to resolve disputes about the ownership of land. Such disputes might relate to the beneficial or legal ownership of the property.
How does a judge decide who owns what share of a property?
Cohabitants must fall back on the general law, unlike a divorce case which has specific statutory guidance. If there is an express declaration of trust, that is generally the end of the matter. Contributions can often say much about the respective intentions of the parties. It can often be a question of what precisely was said by one party to another. It is then, as generally the case, a question of who is believed.
Who can bring such a claim?
Claims are invariably brought under Section 14 if the Act for an Order declaring the nature and extent of a person's interest in property subject to a trust of land and/or for an order for sale of the property (Section 14(2)(a). To bring a claim, a party must establish that they are either a trustee of land or have an interest in the property subject to a trust of land. The disputes are either:
(a) Claims against the legal owner by a claimant not named in the title documents;
(b) Disputes as to the share of beneficial ownership between joint legal owners where there is no declaration of trust.
(c) Disputes between former cohabitees as to whether a property should be sold following the breakdown of the relationship.
(d) Accounts i.e. disputes as to whether one or other party is entitled to recompense for exceptional contributions made before or after breakdown.
What is the "burden of proof"?
In all cases, the burden of proof rests with the party who is not the legal owner. Where the property is purchased in the sole name of one of the cohabitants and there is no express declaration of trust, a Claimant must necessarily adduce convincing evidence establishing that they have some beneficial interest in the property. In legal terms, this claims a : constructive trust.