Many people incorrectly think that unmarried couples acquire the same rights as married couples or they believe in the myth of ‘common law marriage’. Strict principles of property and trust law apply to unmarried couples which is vastly different to the law governing the breakdown of marriages or civil partnerships.
Topics to be answered in this article
What property rights do unmarried couples have?
Unmarried couples have no automatic right to share in the other’s savings, investments, pensions or housing when they separate. Any assets held jointly, unless stipulated differently by a written agreement, will fall to be divided equally. This can cause a significant dispute when one party has been the main contributor towards a joint bank account for example.
When an unmarried couple separate neither can be bound in the same way as a married couple to provide monthly financial support or maintenance to the other, if they can afford it, for a set period of time. The situation is certainly different where there are children born to the parties. In that event, the primary or main carer of the children, the parent with whom the children spend the greater number of nights or time, is entitled to child support payments from the other parent. Such payments are assessed and governed by the Child Maintenance Service, although there is nothing stopping the parties agreeing a different amount that is to be paid.
What is TOLATA?
TOLATA stands for the Trusts of Land and Appointment of Trustees Act 1996. TOLATA gives courts certain powers to resolve disputes between unmarried couples when it comes to properties. Pursuant to this act the court, with guidance from a number of reported court cases, will determine who the legal and beneficial owner of the property is and in what proportions.
What is a Trust in the context of TOLATA?
The basic meaning of a trust in the context of land is that the title to the land (the legal interest) is separate to the underlying ownership (the equitable or beneficial ownership – who owns what in terms of value).
All property therefore has a legal ownership and a beneficial ownership. In a TOLATA scenario it is therefore possible that the legal owners of the property do not actually have any underlying ownership of the equity in the property, or the legal ownership might not reflect the beneficial ownership. A property could be held legally jointly, but the beneficial ownership could be split 75/25 between the owners.
What is a TOLATA claim?
You can make a TOLATA claim if you, or your partner, owns a property solely or together, or you have lived in the other’s property and contributed towards it in certain ways.
TOLATA is commonly used by separated couples, or individuals (friends, siblings etc) that own property together or individually, to ask the Court to declare what their respective interests in the property are i.e. determine who owns what portion of it. The Court can also be asked to order the sale of the property that is held in trust, in order for the parties to realise their respective interests in it.
There are a number of other factors that the Court can take into account when determining who is to receive what on the sale of the property particularly if one person has been excluded from the property for a period of time, or if one party has been solely paying the mortgage. Consideration can be given by the Court under a TOLATA claim to compensate parties if these events have transpired. These are complex arguments to make under the doctrine of equitable accounting which require specialist legal advice before advancing.
When can a TOLATA claim be made and who can make it?
A TOLATA claim can be made at any point, but it is prudent to comply with the Pre-Action Protocol outlined by the Civil Procedure Rules before jumping to making such a claim. This includes:
- Gathering evidence eg as to legal and beneficial ownership, previous discussions, conveyancing files, valuations, contributions etc
- Exchanging evidence with the other side and seeking to negotiate reasonably
- Sending to the other party a detailed Letter Before Claim setting out the background, facts, issues and proposed solution
- Engaging in a form of Alternative Dispute Resolution or Non-Court Dispute Resolution such as solicitor correspondence, roundtable meetings, mediation with a neutral third party etc
Either legal owner of the property can bring a TOLATA application to Court. Or the non-legal owner can make an application under TOLATA if they are advised to do so on the basis that they have a strong constructive trust claim where they believe it would be unconscionable to deny them a beneficial interest in the property.
Claims negotiated out of Court can be settled in a matter of weeks or months. If matters proceed to Court it can take 6 to 18 months, sometimes even longer, to conclude the Court case.
How can Goughs help?
At Goughs we have an expert dedicated team, experienced in TOLATA disputes, to help and guide you through the process from start to finish. We regularly succeed in negotiating a settlement out of Court, saving our clients time and money. But where it is required, our experienced litigators are on hand to fight for your entitlement and to break the deadlock through a carefully managed court application. Get in contact with us today.
