Cohabitees: jointly owned property

A cohabiting couple who are the joint owners of a property are trustees of land subject to a trust of land. They are also the beneficiaries of that trust of land.

Cohabitees: solely owned property

If the property is held in only one party’s name but is subject to an implied, constructive or resulting trust in favour of himself and the other party, the legal owner is the trustee of a trust of land and both parties are the beneficiaries of that trust of land.

Other parties

As well as cohabitees who may be trustees and beneficiaries under the trust of land, an application may also be made by: personal representative of a beneficiary, trustee in bankruptcy of a beneficiary, chargee, mortgagee, receiver, judgment creditor with the benefit of a charging order against a beneficiary’s interest in the land.

On relationship breakdown, particularly in cases where each party is beneficially entitled to 50% of the trust of land, disputes may arise between the parties in their capacities both as trustees and as beneficiaries of the trust of land.

Disputes may also arise if one trustee or beneficiary tries to act without consultation. If one party wishes to sell the property and the other does not, an application may have to be made to the court. The party seeking sale has the right to apply in his capacity as a trustee of a trust of land and in his capacity as a person interested in the land.

The orders the court can make:

In applications brought under TOLATA 1996 the courts have broad powers and can make a declaration as to the parties’ property rights according to established principles of trust law, but the court has no discretionary powers to adjust those rights.

The court has the right to:

• Regulate the exercise of the right of occupation and use by the beneficiaries of the land.
• Partition the land.
• Order or refuse that the land be sold.

The orders the court cannot make:

• • Appointment or remove of trustees
  • Altering the beneficial interests that may exist in the land.
  • There is some uncertainty as to whether or not the court can order one party to buy out the other against the seller’s will.

The factors a court considers in determining an application

The matters to which the court has regard in determining an application for an order under section 14 of TLATA 1996 include:

• The intentions of the person who created the trust.
• The purposes for which the property subject to the trust is held.
• The welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home.
• The interests of any secured creditor of any beneficiary.

Resulting trust

To prove an interest in a property by way of resulting trust, a direct contribution to the purchase price, including mortgage repayment premiums must be established.

To prove an interest through an express oral agreement the categories of detrimental reliance are broad and are regulated by the terms of the agreement. The remedy provided by the court will often be proportionate to the degree of detrimental reliance and what the beneficiary actually gave up.

Constructive trust and proprietary estoppel

The detrimental reliance necessary to prove a constructive trust is narrower. It is no longer restricted to a direct contribution to the purchase price and need not be related directly to the property.

Practice direction on pre action conduct

A letter before action and a defendant’s response.

Proof of consideration of Alternative Dispute Resolution or mediation

Disclosure of essential documents.

Failing to comply with the pre action stage correctly may be taken into account when determining the issue of costs.

Entering a restriction against title

In cases where a party is not a registered proprietor of the property and his beneficial interest is also not recorded at the Land Registry, it is advisable to try to apply for a restriction on the title to prevent the registered owner from selling or charging the property.

Unless you are applying with the proprietor’s consent, your client will need to satisfy the registrar that there is a trust. You will need to explain the circumstances that have caused it to arise. The restriction will be a notifiable one and the Land Registry will send the registered proprietor a notice, giving them the opportunity to object to the registration of the restriction.

Procedure under Part 7 and Part 8

Our legal team will consider the relevant and appropriate procedure in your matter. Below, we outline the two procedures available depending on complexity of the legal issues:

Part 7 procedure

We will issue a Part 7 claim if your case involves a significant dispute of fact.

This procedure requires service of a claim form and particulars of claim. Witness statements are ordered to be simultaneously exchanged at a later date.

Part 8 procedure

We will consider issuing a Part 8 claim if the case does not involve a substantial dispute of fact. This procedure requires a concise statement of case and an accompanying statement from the very outset of the case. This has the effect of revealing one party’s factual case before the other party has revealed his case. This could be a significant disadvantage to the claimant.

Proceedings under the Children Act 1989

It is not unusual that in disputes between cohabitees, there may also be proceedings under Schedule 1 to CA 1989 for the benefit of any minor children of the couple. For example, resident parent may need a top-up of capital to provide for her housing needs which will be held until the child’s majority. It is possible for both sets of proceedings to be dealt with as one at a direction stage or at trial.

Our experienced team of family lawyers will be able to assist you with securing your financial rights as an unmarried partner. Please note that, such claims are often of a very complex nature and it is strongly advisable to obtain good legal advice from the outset.