When it comes to property disputes in a separation, particularly those involving co-ownership of land or property, the Trust of Land and Appointment of Trustees Act 1996 (TOLATA, TLATA, ToLata) plays a crucial role in the UK’s legal framework. But what is it exactly? We all need a bit of help when it comes to understanding TOLATA.
TOLATA provides a comprehensive set of rules and guidelines to govern the rights, obligations, and responsibilities of co-owners, trustees, and beneficiaries. In this blog, we will delve into the intricacies of TOLATA, exploring its key provisions and shedding light on its impact on property disputes in the UK.
What is TOLATA?
The Trust of Land and Appointment of Trustees Act 1996 is the legislation that governs the co-ownership of land and property in England and Wales. It was introduced to modernise and simplify the legal framework surrounding co-owned properties and to provide clear rules for resolving disputes arising from such ownership arrangements.
Scope of TOLATA
TOLATA applies to various types of co-ownership arrangements, including joint ownership, beneficial interest under a trust, and cases where one party contributes financially to a property owned by another. It covers both residential and commercial properties, offering a framework to resolve disputes related to occupation, use, and sale of co-owned land.
TOLATA is built on several core principles, including:
The intention of the parties:
TOLATA emphasises the intentions of the parties involved in a co-ownership arrangement, whether express or inferred.
The welfare of any minor:
The Act highlights the welfare of any minor who has an interest in the property.
The purpose for which the property is held:
TOLATA considers the purpose for which the property is held and the interests of any secured creditor.
Key Provisions of TOLATA
The right to occupy.
TOLATA recognizes the right of an occupier to remain in a property even if they are not the legal owner, subject to certain conditions.
The Act recognizes and protects the financial and non-financial contributions made by co-owners and provides a basis for determining each party’s share of ownership.
Sale of the property.
TOLATA grants the court the power to order the sale of the property if it deems it necessary, considering the interests of all parties involved.
Appointment of trustees.
TOLATA enables the appointment of trustees to manage the property, protect the interests of all parties, and make decisions regarding its administration.
The Act encourages alternative dispute resolution methods such as mediation and negotiation as a means to resolve disputes more efficiently, before resorting to court proceedings.
Application in Practice
TOLATA is commonly invoked in cases where disputes arise between co-owners, such as unmarried couples, family members, or business partners. Typical scenarios include disputes over the sale of a property, disputes regarding the occupation or use of the property, or disagreements concerning the extent of each party’s financial contributions. TOLATA provides a structured legal framework for resolving these disputes and promoting fairness among co-owners.
Seeking Legal Advice
Given the complexity of property disputes and the specific circumstances involved, it is always advisable to seek professional legal advice when dealing with TOLATA matters. A qualified solicitor with expertise in property law and TOLATA can provide guidance, help negotiate settlements, or represent you in court if necessary.
It will aid the mediation process if both parties have taken legal advice before entering joint mediation. You should obtain that legal advice in writing, and bring it into the mediation room.
How TOLATA affects mediation
How is the property held?
- If you are joint tenants, is that in equal or unequal shares?
- Are you in a joint tenancy or is the property held as Tenants in Common?
- You should obtain a copy of the TR1 form the land registry, which will confirm the ownership
If the property is held by one party
- The second party is then likely to be claiming a beneficial interest
- Usually, this means you are negotiating around a settlement figure, rather than who owns the property or splitting the equity in the property
Where the property is held equally
- One party may have put in a larger deposit and that may now need to be negotiated
- Works on the house may have been funded unequally, and you need to negotiate how that is handled in the settlement
- TOLATA deals with property and jointly held assets
- It is very rare for other assets to be held jointly, but it does happen
- If, for example, there is a savings pot held in the name of one party, which you are agreeing to split (equally or unequally) this is a matter of Civil Law and is dealt with under a Settlement Deed, not under TOLATA
Mediation and financial disclosure
- In mediation, the settlement is about what the parties can agree, not necessarily what the law states
- The parties must undergo financial disclosure – this is where they disclose to each other the value of any jointly held assets; usually, this relates to the property and the need to agree the valuation
- If the property is to be sold, the SLE value will replace the estimated value
- In cases involving beneficial interest, no financial disclosure is required
The legal process
- TOLATA cases are usually heard in a higher level court than the family court
- This means the case is heard by a more senior judge
- There is a stricter application of the law in TOLATA cases as there is no question of ‘need’ – in family law, ‘needs’ are the primary consideration
- The cost of a TOLATA case is usually far greater than a family case
- Once an agreement is reached in mediation, a solicitor can draft a Deed of Separation (sometimes called a Separation Agreement)
- The Deed of Separation is signed by both parties and witnessed
- This document is not legally binding – as a court cannot be bound by something it has not approved
- But you can ask a court to impose the terms, should one party choose not to follow what has been agreed
TOLATA is undeniably a complex area of law. The guidelines provided above are intended to offer you a foundational understanding of its principles and applications. However, the intricacies of property disputes and co-ownership arrangements can vary widely, and the specific circumstances of your case may present unique challenges.
Therefore, it cannot be stressed enough that seeking legal advice is paramount before deciding on how you wish to proceed. Making informed decisions with the assistance of legal professionals is the best course of action when dealing with any TOLATA-related matter. Mediation can also be a valuable tool in these disputes, as it allows parties to engage in constructive discussions and can often lead to mutually acceptable resolutions, saving you time and money.