Under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA), the court is able to determine the extent of a person’s interest in property.

These provisions generally only apply outside marriage as matrimonial assets are dealt with under separate legislation.

Sole Ownership

For a person to establish a beneficial interest they must prove a trust either by either express agreement, evidence of an agreement to share the property beneficially plus detriment or conduct such that the court should infer a common intention to share the property.

In Lloyds Bank plc v Rosset 1990 the House of Lords made it clear where equity will impose a trust on the sole legal owner.

Joint Name Cases

Since April 1998, purchasers of property have defined their interests in the property in the Land Registry document known as a TR1. The options are:

  1. Beneficial joint tenancy;
  2. Tenants in common in equal shares;
  3. Tenants in common in unequal shares.

Options 2 and 3 give rise to an express declaration of trust. The parties’ beneficial ownership is determined by the terms of that declaration of trust (unless there are reasons to set-aside the declaration of trust).

If joint owners purchase as tenants in common and there is no declaration of trust the presumption is beneficial interest equal to their contributions.

Orders for Sale

If there is a trust of land application can be made to the court to deal with any dispute and the court can order a sale of the property and division of the sale proceeds in accordance with that trust. The court will make an order to reflect the underlying nature and purpose of the trust and TOLATA sets out factors which the court must have regard in determining an application. The court may order to delay the sale, for example when it finds that the property is still needed as family home until the children have completed their education or moved out.

The effect of TOLATA is to combine the previous statutory provisions and more recent case law to ensure that the courts have broad and flexible powers when it comes to co-ownership disputes.

If you are seeking advice on these issues please contact Craig Batko on 01372 750102