Property can be jointly purchased by unmarried couples, family members, friends, and business associates. Following separation or disagreement, disputes often arise between individuals regarding their property rights. Such property disputes are dealt with in accordance with the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”).
TOLATA allows individuals who believe that they retain an interest in a property, to bring a claim to resolve an ownership dispute. In the event individuals are unable to amicably resolve the dispute, they are able to take legal action and can apply to the Court for the following remedies:
- Declaration of Trust – If your equity in a property remains uncertain, notwithstanding your financial contributions and in the absence of an express Declaration of Trust (TR1). You are able to seek a Declaration of Trust from the Court, which determines your equitable share in the property.
- Order for Sale – In the event the joint owner refuses to engage in the sale of a property, you can force the sale by way of an Order for Sale from the Court. When applying for an Order for Sale, you need to ensure that you satisfy the requirements set out in Section 15 of the TOLATA.
Property ownership can be held in the following three ways:
1. Joint Tenants – When two or more people own a property, they own the property as a whole and there are no specific shares which each individual holds. The principle of survivorship applies, whereby if the joint owner of a property dies the surviving co-owner(s) automatically inherits their share of the property. As a result, the Deceased co-owner’s share in the property will not form part of their Estate.
2. Tenants in Common in Equal Shares – This is when each individual holds equal shares in a property, for example if two people purchased a property as tenants in common in equal shares, their equity in the property would be held 50/50. The principle of survivorship does not apply; therefore, the individual’s share would form part of their Estate and would pass according to their Will or the laws of intestacy.
3. Tenants in Common in Unequal Shares – In contrast to the above, this is when individuals hold a property in unequal shares. For example, if two people purchase a property as tenants in common in unequal shares, and they decide to split the equity 60/40. This is common in situations where one individual has financially contributed more than the other co-owner and wishes to hold a greater share of the Property. As stated above, the principle of survivorship does not apply in this type of ownership.
To determine how a property is held, you should check the following:
- Land Registry Title (“Official Copy”) This is a legal document which illustrates the legal owners of a property. If there is no survivorship clause, then there is an assumption that the property is held as joint tenants, unless the tenancy was severed thereafter. It is not advisable to solely rely on the Official Copy to aid in determining ownership.
- TR1 Form – The TR1 form at box 10 contains an express Declaration of Trust, which will determine how a property is held.
- The Conveyancing file – This will contain your conveyancing solicitor's detailed instructions in the form of attendance notes and correspondence, which can aid with clarifying the parties’ intentions at the time of purchase.
- Any communication such as messages, emails or letters showing an agreement made regarding the Property – If you wish to make a claim for beneficial interest in a property, this information and documentation is required to determine what was agreed and what the parties’ intentions were in respect of the ownership of the property.
- Evidence of financial contributions made towards the Property – This can include but is not limited to bank statements, invoices, receipts to demonstrate payments towards the property outgoings such as mortgage, bills and renovation works. As stated above, if you wish to make a claim for beneficial interest in a property, this information and documentation will be required.
Upon purchasing a property, your conveyancing solicitor will provide you with copies of the above for your records following completion.
Not necessarily, most TOLATA disputes are often settled through negotiation or mediation between the parties. However, if an agreement cannot be reached between the parties, Court action is available; however, this should be used as a last resort.
At Premier Solicitors, we provide our clients with expert, tailored advice regarding property disputes, including but not limited to TOLATA disputes.
If you have any further questions regarding TOLATA disputes or require assistance in respect of a property dispute, please do not hesitate to contact contentiousprobate@premiersolicitors.co.uk.
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