TOLATA Claims

What a TOLATA Claim Is and Who Can Bring One

Where land in England and Wales is held by one person for another, or by co-owners behind a trust, it is a trust of land, and section 1 of the Act says the reference to a trust is to any description of trust, whether express, implied, resulting or constructive. The people on the register are the trustees; the people entitled to the value are the beneficiaries, and if you own your home with your former partner each of you is both.

Section 14 lets any person who is a trustee of land, or who has an interest in property subject to a trust of land, apply to the court for an order. That covers a joint owner, a former partner claiming a beneficial share in a home in the other's name, and a relative or investor who contributed to the purchase.

The claim is a civil claim, not a family application. Section 23 of the Act defines the court as the High Court or the county court, and the claim runs under the Civil Procedure Rules. Unmarried couples use it because the orders GOV.UK describes on divorce or dissolution, such as a pension share or spousal maintenance, apply only to couples who were married or in a civil partnership. Child maintenance is different and applies whether or not the parents were married. How a beneficial share is established, including the Jones v Kernott starting point that a couple who buy a family home in joint names hold equal shares unless a different common intention is shown, is on our page on property disputes between unmarried couples.

What the Court Can and Cannot Order

Under section 14(2) the court may make any order it thinks fit relating to the exercise by the trustees of any of their functions, or declaring the nature or extent of a person's interest in the property. Section 6(1) gives trustees of land all the powers of an absolute owner, so the court can order a sale, postpone one or attach terms to it, and declare the shares in which the proceeds are held. It can also relieve the trustees of any obligation to obtain a person's consent or to consult them.

It can deal with occupation as well. Under sections 12 and 13 the trustees may exclude or restrict the right to occupy of one or more of the beneficiaries, though not all of them and not unreasonably, and may require the person who stays to compensate the person kept out.

The limits matter as much as the powers. In Bagum v Hafiz [2015] EWCA Civ 801 the Court of Appeal held that the court cannot order one beneficiary to transfer their share to another, because disposing of a beneficial interest is not a function of the trustees, but it can direct the trustees to sell the property to one of the beneficiaries rather than on the open market. Section 14(3) also stops the court appointing or removing trustees under this section. The court declares the interests that already exist under trust law; it has no power, as the family court has on a divorce, to move property from one partner to the other to meet their needs.

Money for a child is a separate question. An application under Schedule 1 of the Children Act 1989 can ask the family court to provide a home for the child, and in White v White [2003] EWCA Civ 924 the Court of Appeal said competing applications under the two Acts should be heard together by the same court.

What the Court Takes Into Account

Section 15 lists the matters the court is to have regard to on a section 14 application:

• the intentions of the person or persons 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 any beneficiary

On most applications the court also has regard to the circumstances and wishes of the adult beneficiaries entitled to an interest in possession, or of the majority by value if they disagree, and on a section 13 occupation application to those of each beneficiary entitled to occupy. The section says the matters "include" those listed, so the court can weigh other things, and no single factor decides the case. Section 15 does not apply where the application is one to which section 335A of the Insolvency Act 1986 applies, which is the position when a trustee in bankruptcy applies.

Evidence and Common Problems

The court is likely to want:

• the title register and the transfer deed, with any declaration of trust or form JO completed on the purchase
• the conveyancing file and any correspondence about how the property was to be held
• bank and mortgage statements showing the deposit, the repayments and who paid for improvements
• messages, emails and letters in which ownership or a sale was discussed
• a current valuation and a redemption figure from the lender
• evidence about any child living in the property and their housing needs

The problems that come up most often:

• no written record of what was intended, so the claim rests on a common intention deduced objectively from conduct
• a signed declaration of trust that one party now regrets, which normally moves the dispute from the shares to whether and when the property is sold
• a mortgage in joint names, because the lender's interest is a section 15 factor and the redemption figure fixes how much equity there is to argue about

How a TOLATA Claim Works

Whether the claim settles or is decided, the work runs in this order:

1. Advice and the file. We obtain the title register, the transfer and the conveyancing file and tell you what the court is likely to declare and whether a sale is realistic.
2. Pre-action letter. The Practice Direction on Pre-Action Conduct expects the parties to exchange enough information to understand each other's position, to try to settle and to consider alternative dispute resolution before proceedings. We set out the claim, the documents and a proposal.
3. Settlement attempts. The Practice Direction says litigation should be a last resort, so we use negotiation, mediation and other out of court options and Part 36 offers, which can be made before a claim is issued.
4. Issue. Where the question is unlikely to involve a substantial dispute of fact the claim can be issued under Part 8, with the written evidence filed and served with the claim form; otherwise it is issued as an ordinary claim with particulars of claim. A claim like this is usually started in the County Court, and may be started in the High Court where the amount in dispute, the complexity of the facts, legal issues, remedies or procedures, or the importance of the outcome to the public mean it should be dealt with by a High Court judge. The court fee is published on GOV.UK, and some people on a low income can get help with court fees.
5. Response and directions. On a Part 8 claim the defendant files an acknowledgment of service within 14 days of service, stating any objection to the Part 8 procedure, and the court then gives directions for evidence, any valuation and the hearing. Valuation evidence needs the court's permission, and the court may direct that it comes from a single joint valuer.
6. Hearing and order. The judge hears the evidence, makes the declarations and orders the Act allows and decides who pays the costs. We then help you put the order into effect.

When Legal Advice Is Especially Important

Advice is most valuable before the first letter, and especially where:

• the home is in one name and your claim depends on conduct rather than on a document
• a child lives in the property and you need to decide whether a Schedule 1 application should run alongside the claim
• a creditor with a charge over the other owner's share is pressing for a sale, since the court must consider the interests of any secured creditor
• you have received a Part 36 offer, because the costs of refusing it can be heavy
• there is domestic abuse: if you are in immediate danger call 999, the National Domestic Abuse Helpline is 0808 2000 247, and an occupation order can regulate who lives in the home while the ownership dispute is decided

Under Part 44 of the Civil Procedure Rules the general rule is that the unsuccessful party pays the successful party's costs, although the court may make a different order and takes the parties' conduct into account. A Part 36 offer must normally specify a period of at least 21 days before its costs consequences bite, and it stays open for acceptance until it is withdrawn.

How RakLAW Solicitors Can Help

We act for claimants and defendants in section 14 claims from 42 Shad Thames, London SE1 2YD, near Tower Bridge in Southwark, drawing on our civil litigation and family law work because these claims sit between the two. The first step is a free 15-minute consultation on 0203 345 2000, in which we tell you what the court could order and explain how we charge. We are privately funded and do not offer legal aid.

Before any claim is issued we check whether a cohabitation agreement already answers the question, whether a settlement recorded in a deed would serve you better than a hearing, and whether the wider questions covered on our pages on separation for unmarried couples and unmarried parents and children need attention at the same time. Our unmarried couples and cohabitation page sets out the related services.