The ending of relationships is never easy and it is often made harder by trying to work out who gets what can often lead to disagreements, with often the biggest disagreement being what happens to the house.

Unmarried couples are increasingly more likely to purchase a home before getting married, but what happens to this jointly owned home should the unmarried couple separate?

Unlike their married counterparts, who are protected by legislation surrounding divorce and have use of the Family Courts, disputes between unmarried couples who co-habit a property is a dispute over property ownership and therefore a civil matter.

However, there is legislation to assist unmarried couples in the circumstances, the Trusts of Land and Appointment of Trustees Act 1996 (also known as ToLATA).

What is ToLATA?

At its core, ToLATA gives the court the power to order the sale of the property and also the proportion of the sale proceeds to which any individual with a share in the property is entitled.  People should be aware at this point that the court will take into consideration a number of factors when determining proportion of the property owned.

A ToLATA claim can therefore be used to determine:

• Whether a property jointly owned should be sold and what share of the sale proceeds each co-owner should receive.  The court will consider what were the intentions of the two people at the time the property was bought.  If the intention was to live in the property together and bring up a family and that cannot be fulfilled any longer because the relationship has broken down, the court is likely to order the sale of the property.  

• If an individual has a beneficial interest in the property. This is relevant in situation in which a party’s name is not on the legal title but they have contributed to the property in some capacity which suggests there was an agreement that they should share in the property ownership.

• If the property  should be sold due to the application of a creditor or beneficiary. This is scenario applies when a third party, often a parent or grandparent, has some financial interest in the property and is looking to recover it.

Who can make a ToLATA claim?

Anyone who is a co-owner or has a beneficial interest in the property is able to make an application for a ToLATA claim however there are some less common individuals who may also make an application. These are:

• Personal representatives of a beneficiary
• judgement creditors with a charging order secured against the property

• trustees in bankruptcy
• receivers

Do I have to go to Court straight away?

In short, no.

Prior to starting any ToLATA claim, it is worth considering if it is possible to settle the dispute out of court. Settling out of court is more amicable and is a quicker process and saves costs.

There are two common ways to resolve ToLATA matters outside of the court.

• Mediation, in which an impartial third party will help you and your ex-partner come to an agreement over the property

• Solicitors Negotiation, in which your solicitor will work with you to negotiate with your ex-partners solicitor to come to an agreement

What information do I need to gather before a claim begins?

Before any work can begin it is important to establish who owns the property and in what proportion. While you may feel that by putting more money into the property, by paying all of the mortgage or having paid the full deposit, it is often the case that when purchasing the property that couples agreed to hold the property in equal shares as tenants in common.

Therefore, before any work can begin, you should look to obtain a copy of the ‘TR1’ form that you will have filled out in the process of purchasing your home. Your conveyancing solicitor should have given a copy of this form to you, and they should hold a copy of it within your file if you have misplaced it. 

Our Litigation team can make the ToLATA process easier by advising on the appropriate course of action and helping to prepare your application for trial. The process of ToLATA can be highly emotive, especially with such a valuable asset on the line, and it is therefore important to get expert advice from our Litigation department. Please do not hesitate to contact a member of our Litigation team if you feel that a ToLATA claim may be of benefit to you.  

Article written by Edward Capstick – Litigation Solicitor