The Civil Partnership Act 2004 (Amendment) Bill has failed to gain support on its second reading at the House of Commons. So what does that mean? Put simply anyone not married or in a civil partnership, but who has been in a relationship that has resulted in the purchase of property or where assets have been acquired are left with the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) to support their arguments on distributing those funds.
This piece of legislation gives the Court certain powers to resolve disputes about the ownership of land/property. The dispute may relate to the legal or beneficial ownership of the land/property.
There are two main types of application that can be made under TOLATA to resolve disputes about land/property owned by two or more people. These are:
· to decide who is entitled to occupy the property, and
· to decide the nature and extent of the ownership.
These applications permit a Court to decide who are the legal and beneficial owners of the land or property, and in what proportions. There are complementary powers in TOLATA that allow a court to direct the owner of land to behave in a certain way. In disputes about co-ownership, these powers are used most frequently to require a co-owned property to be sold so that the proceeds can be divided.
TOLATA disputes commonly arise between cohabiting couples and in those instances; we would have to look at the law in relation to trusts. This is different to matrimonial law as neither partner has a legal obligation to provide for the other, and thus you would have to rely on the law of trusts, namely resulting and constructive trusts.
A resulting trust is where one party, whose name is not on the legal title of the property, has made an outright payment towards the deposit or has paid the mortgage installments e.g. if one party had made a contribution towards the deposit of the property they could argue that a resulting trust has arisen. It is helpful to collate all documentation relation to your interest in the property in order to strengthen any argument that you make in this respect.
To show that you have a beneficial interest under a constructive trust, it would need to be established that at any time prior to the acquisition of the property, or exceptionally at some later date, there has been an agreement, arrangement or understanding reached between the parties that the property is to be shared beneficially e.g. referring to the property as the family home.
Alternatives to Court proceedings
Before issuing Court proceedings under TOLATA, the person looking to make an application should consider alternative ways to settle the dispute e.g. by discussing matters directly with the other party or by attending mediation. If court proceedings are issued, the Judge dealing with the case will be interested to see if other methods of dispute resolution such as these have been attempted.
If negotiation and mediation are not successful, then proceedings can be commenced through the County Court to enable a District Judge to determine the dispute. Where it is decided by the Court that a Claimant does have a share in a property, whatever it may be, the Court must determine the size of the share. Case law in this area shows that the Court will try to achieve fairness between the parties.
The Court also has the power to order a sale of the disputed property. However, whether the Court will use their discretion to order a sale depends upon whether the underlying purpose of the trust for sale is continuing. The Court will look to see why the property was purchased in the first instance. For instance, if the property was purchased in order to provide a family home and, due to the breakdown of the parties’ relationship, the purpose of the trust has arguably come to an end, and a sale of the property may be ordered. If, however, the purpose of the trust was to provide a long term home to the other party, an immediate sale is unlikely to be ordered.
If you would like further advice about a TOLATA dispute that you have then please contact our team of family lawyers who will be able to help.