Owning Property Jointly

This is a complicated area of law.  It is summarised below but concentrate - it is tricky!

When you own property jointly, each of you owns the property for themselves AND they own the property on behalf of the other owner.  This is a trust. 

If you live with somebody but only one of you owns it, that owner may own the property for themselves AND for the other cohabitee.  This is another trust.

The person owning property for somebody else is the trustee.  The person getting the benefit from somebody else owning it for them is the beneficiary.  And you can be both at once!

The problem with trusts is that sometimes they happen by accident.  And sometimes the terms of the trust are not defined.  How much one owner actually owns isn’t always known or agreed upon.

The law

Where parties have a dispute about property, their usual option is to apply for an order under section 14 of the Trusts of Land and Appointment of Trustees Act (we call this TOLATA, which is less of a mouthful).  Even if the parties have been in a relationship, the law relating to married couples does not apply – there is no such thing as a common law spouse!

When considering an application relating to TOLATA, the court has wide powers to confirm the parties’ property rights but the court cannot make changes to those rights.

If the couple have children, it might be appropriate to make a second application on their behalf.  This would be according to the rules set out in the Children Act 1989 and both applications would be heard together.

The sort of disputes TOLATA deals with are:

• About when a jointly owned property should be sold.  Perhaps a couple have separated and the owner wants to sell the house.  Their former partner may need to apply for the sale to be stopped until their claim has been considered.

• About how much of the property each owner owns.  Even if it is agreed that the property should be sold, how much should each party receive from the sale proceeds?

• When one person isn’t on the deeds but believes they are an owner.  Perhaps they have paid some money towards the property or they think they are a common law spouse.  The other owner might disagree entirely or might argue about how much they own.

What can the Court do?

The court may make an order:

• limiting the trustees actions, maybe preventing a sale or saying who can live in the property;

• confirming how much each party is entitled to, if anything.

The court cannot make any order:

• changing who is a trustee – they can’t remove one or add one;

• changing the amount that each beneficiary is entitled to.

What facts does the Court consider?

When considering an application under TOLATA, the court will consider

• the intentions of the parties when the trust was created;

• the purposes and use of the property;

• the welfare of any children living in the property as their home;

• any secured loans on the property.

These factors are not in any particular order and the court may consider other relevant facts. The court’s function is to apply the various criteria set out in section 15 of TLATA 1996 to the particular facts of the individual case, acknowledging that they are not exhaustive. No factor has priority over any other.