Unmarried cohabiting couples who separate do not have the same rights as married or civil partnership couples. Therefore, if a dispute arises over property ownership, the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) controls how these disputes are dealt with.
Under these circumstances, couples must show their entitlement to share in the property or land, and the courts will use TOLATA to decide:
- Who has the right to occupy the property;
- The extent of the parties’ ownership.
Typically, the court does not have the discretion to vary co-ownership or adjust the currently owned shares. Courts will assess claims based on a dispute over the facts of the case, known as a Part 7 claim, or a dispute over the legal principles involved, a Part 8 claim.
What are the different types of property ownership?
If you are not married or in a civil partnership, you can establish property ownership in several different ways, and TOLATA may be applied to ascertain your rights accordingly. There are two main ways in which cohabitants may have an interest in property:
- as a joint owner or,
- where the property is in the sole ownership of the other cohabitant, under a trust.
Joint legal owners
You can own the property either as joint tenants or tenants in common. A joint tenancy is where the whole property is equally owned by those named as owners, with no specified shares. A tenancy in common gives each owner a set of shares of the property, such as half or a quarter ownership.
Under TOLATA, the court will not vary this ownership unless it can be shown that there was a mistake or fraud involved. Tenants in common may dispose of their interest either on death or during their lifetime without affecting the interests of the other co-owners.
Joint owners with no declaration of trust
A tenancy in common cannot exist in law, only in equity. Therefore, it is wise for tenants in common to set up a declaration of trust when they purchase a property.
If there is no declaration of trust, or the declaration of trust stated that the property was owned in unequal shares, there will be an assumption of 50:50 ownership, which can only be varied if there is evidence to the contrary.
Often more complex or more significant cause for tension is when disputes regarding beneficial interests arise where a property is solely owned by one cohabitant. Under these circumstances, the courts will look for a common intention of sharing the property, and if the party who does not have ownership acted on that intention to their detriment. For example, money has been put towards the purchase price or property improvements paid for by the non-owner.
Schedule One Children Act 1989
For separating unmarried couples who have children, a parent can make a financial claim under what is known as a Schedule One of the Children Act 1989. The court can order that one parent make financial contributions to provide a home for the couple’s children.
TOLATA claims can arise simultaneously with a financial provision for children claim from a former partner. The outcome of the TOLATA claims will have a bearing on the outcome of a Schedule One of the Children Act Claim.
How do you make a TOLATA claim?
Before starting a TOLATA claim, you should consider whether you can settle your dispute out of
court. It is usually faster and more cost-effective than going to court if you can. Staying out of the courts can often minimise damage to a relationship and can be a much better option if you and your ex-partner have children together. Typically, the types of alternative dispute resolution for settling TOLATA claims out of court include:
Mediation – mediation involves using an impartial specialist called a mediator to help you reach an agreement regarding your dispute.
Solicitor negotiation – both parties’ solicitors will negotiate on your behalf to reach a settlement.
However, if alternative dispute resolution does not resolve the issue or is not suitable for your circumstances, then the next steps in making a TOLATA claim include:
- Letter before claim – a pre-action letter is sent to the other party or their solicitors along with any evidence and relevant documents.
- Response – your ex-partner, has a specific time frame to respond and set out their case.
- Early Settlement – it is possible to negotiate a settlement during these stages without going to court.
- Court – if it is still not possible to settle your claim out of court, then your case can progress to the court for them to decide.
Expert Legal Advice
Seeking early legal advice is your best form of defence. Proving your legal rights regarding a financial interest in a property, especially if you are not a named owner, can involve complex legal arguments. Therefore, it is vital that you have specialist legal advice to ensure the best outcome.
At Rose & Rose, our family law team are experts in this area of law and work with you to resolve your disputes in the most practical and cost-effective way, guiding you through the entire process and helping avoid unnecessary stress.
Regardless of the complexity of your case, we have the knowledge and expertise to get you the best result through skilled negotiation or robust representation in the courts.
Get in touch with a member of our expert team below.