Who Owns What? Property Disputes and TOLATA Claims: FAQs

8 common questions on TOLATA Claims answered by Martin Didcock, Solicitor in the F Barnes Litigation and Dispute Resolution team.

Property ownership disputes can be particularly difficult when relationships break down, especially where there is disagreement about who owns a property, who is entitled to its value, or whether it should be sold.

What happens if your name is not on the deeds? Can you claim a share of a property you have contributed towards? And what can you do if another owner refuses to sell?

These are common questions faced by unmarried couples, former partners and family members. The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) provides an important legal framework for resolving many of these disagreements.

Here, Martin Didcock, Solicitor in our Litigation and Dispute Resolution team, answers eight of your frequently asked questions about TOLATA claims, beneficial ownership and property disputes.

1. What is a TOLATA claim?

A TOLATA claim is a legal claim concerning the ownership, financial interests or sale of property, brought under the Trusts of Land and Appointment of Trustees Act 1996.

TOLATA is particularly relevant where unmarried couples, former partners, family members or other joint owners disagree about their respective rights to a property.

For example, disputes may arise where:

• One party wishes to sell a jointly owned property, but the other refuses.
• The parties disagree about how much of the property each owns.
• Someone who is not named on the title deeds believes they are entitled to a share.
• There is disagreement about how the proceeds of a property sale should be divided.

TOLATA claims are particularly common following the breakdown of relationships between unmarried couples.

Unlike married couples going through divorce proceedings, whose financial arrangements are generally addressed through family law, unmarried couples do not automatically have the same legal rights to each other’s assets.

TOLATA can therefore provide an important route for establishing and protecting property interests.

2. Can I claim a share of a property if my name is not on the deeds?

Yes. Even if your name is not on the title deeds, you may still be entitled to a share of the property if you can establish a beneficial interest.

There is an important distinction between being the registered legal owner of a property and having a financial entitlement to its value.

For example, a property may be registered in one partner’s name, but the other partner may have contributed towards its purchase or relied on an agreement that they would share ownership.

Depending on the circumstances, a beneficial interest may arise through:

A resulting trust: This may arise where someone has made a direct financial contribution towards acquiring the property, such as paying part of the purchase price or deposit.

A common intention constructive trust: This may arise where there was a shared intention or agreement that both parties would have an interest in the property, and the person claiming an interest acted to their detriment in reliance on that understanding.

However, not every financial contribution or agreement will automatically establish an entitlement.

The court will consider the circumstances and the available evidence when determining whether a beneficial interest exists.

3. What is the difference between legal ownership and beneficial ownership?

Legal ownership concerns whose name is registered on the property title. Beneficial ownership concerns who is entitled to the financial value of the property.

The distinction is important because legal and beneficial ownership do not always belong to the same people.

For example, two people may be named as the legal owners of a property but hold unequal beneficial interests.

Alternatively, one person may be the sole registered owner while another person has a beneficial interest in its value.

In some circumstances, a person may even hold legal title as a trustee entirely for someone else’s benefit, without having any beneficial interest themselves.

Consequently, simply examining whose name appears on the title deeds may not provide the complete picture of who is entitled to the property.

4. How is my share of a property determined if there is no declaration of trust?

Where a family home is registered in two people’s names and there is no express declaration of trust, the usual starting point is that they own equal beneficial shares. However, that presumption can be challenged.

For example, if two unmarried partners jointly purchase a property, the starting presumption will ordinarily be that each has a 50% beneficial interest.

This reflects the principle that, in these circumstances, equity generally follows the law.

However, that does not necessarily mean the property must always be divided equally.

The court may consider evidence indicating that the parties intended a different arrangement, including their financial contributions, discussions and conduct.

The principles governing these disputes have been considered by the courts in cases including Stack v Dowden and Jones v Kernott.

What if there is a declaration of trust?

If the parties have signed an express declaration of trust, either within the property transfer documentation or in a separate deed, that declaration will generally determine their respective beneficial interests.

An express declaration will ordinarily be binding, although it may be challenged in limited circumstances, such as fraud, mistake or duress.

Where a property is registered in one person’s name alone, different legal considerations apply, and the person claiming a beneficial interest will generally need to establish the basis of that entitlement.

5. What will the court consider in a TOLATA dispute?

The court will consider the parties’ legal and beneficial interests, the circumstances surrounding the property and the evidence supporting their respective positions.

Under section 14 of TOLATA, a trustee of land or a person with an interest in property subject to a trust of land may apply to the court for an appropriate order.

This may include an order for the sale of a property or a declaration determining the nature or extent of a person’s interest.

When considering certain applications under TOLATA, section 15 identifies relevant factors, including:

• The intentions of the person or people who created the trust.
• The purposes for which the property is held.
• The welfare of any children who occupy, or might reasonably be expected to occupy, the property as their home.
• The interests of any secured creditors, such as mortgage lenders.

Where the dispute concerns beneficial ownership, the court may also need to examine financial contributions, agreements between the parties and their conduct.

The evidence required will depend on the particular circumstances and the issues in dispute.

6. How can I bring a TOLATA claim?

A TOLATA claim will generally begin with obtaining legal advice, gathering the relevant evidence and exploring whether the dispute can be resolved before court proceedings become necessary.

Before issuing proceedings, parties are expected to follow the applicable pre-action requirements, including identifying the issues in dispute, exchanging relevant information and considering alternative methods of resolving the disagreement.

Where settlement is not possible, an application may be made to the court under section 14 of TOLATA.

The procedure used will depend on the nature of the dispute.

Part 8 proceedings may be suitable where there is unlikely to be a substantial dispute of fact. For example, this may include certain applications for an order for sale where the parties agree on their respective beneficial interests.

Part 7 proceedings will generally be more appropriate where the parties substantially disagree about the facts, such as whether someone has a beneficial interest in the property or the extent of that interest.

Some disputes may also involve an equitable account, where financial adjustments between the parties are considered, or occupation rent where one party has been excluded from occupying the property.

As TOLATA claims can involve complex factual and legal questions, obtaining advice before commencing proceedings is important.

7. How long does a TOLATA claim take?

A TOLATA dispute may be resolved within a matter of months if the parties reach an early agreement. However, contested court proceedings can take considerably longer, potentially two years or more.

The time required will depend on the complexity of the dispute, the evidence involved, the willingness of the parties to negotiate and the availability of the court.

Where both parties are prepared to engage in constructive discussions, it may be possible to reach a settlement before proceedings are issued.

However, where there is a substantial disagreement about beneficial ownership or additional financial claims, the matter may require detailed evidence, court hearings and potentially a trial.

Many substantial TOLATA disputes are allocated to the multi-track and may be subject to costs management.

Early legal advice can help clarify the parties’ positions and identify opportunities to resolve the dispute without unnecessary delay or expense.

8. Who pays the legal costs in a TOLATA dispute?

The general rule in TOLATA disputes is that the losing party pays the winning party’s legal costs. However, this is not guaranteed, and even a successful party is unlikely to recover all their costs.

TOLATA claims are civil disputes, meaning the court has discretion when deciding who should pay legal costs. The court will usually consider whether those costs were reasonable and proportionate, as well as the conduct of the parties throughout the proceedings.

In Martin’s experience, a successful party will typically recover around 60% of their legal costs from the other side, although this will vary depending on the circumstances.

In exceptional cases, where one party has behaved particularly unreasonably, the court may award costs on a more favourable basis.

Can making a settlement offer affect legal costs?

Yes. Making a reasonable settlement offer at an early stage can have significant advantages.

For example, a formal offer made under Part 36 of the Civil Procedure Rules can provide additional financial protections if the matter proceeds to trial and the eventual outcome is more favourable than the offer.

This may include enhanced interest, a more favourable costs order and an additional financial award, subject to the applicable rules.

For these reasons, it is important to consider the potential costs of litigation, and opportunities for settlement, before bringing or defending a TOLATA claim.

Need advice about a property ownership dispute?

Disagreements over property ownership can be both financially significant and emotionally difficult, particularly where a family home or a former shared property is involved.

Whether you are seeking to establish a beneficial interest, resolve a disagreement over ownership or obtain an order for sale, understanding your legal position is an important first step.

At F Barnes Solicitors, our Litigation and Dispute Resolution team can advise on TOLATA claims, beneficial ownership disputes and property-related litigation.

Contact Martin Didcock and our Litigation and Dispute Resolution team to discuss your circumstances and how we may be able to assist.

This article is intended to provide general information about the law in England and Wales and does not constitute legal advice. Every case depends on its individual facts and circumstances.