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Property rights - overviewTrusts of Land and Appointment of Trustees Act 1996
An application under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996), s 14 may be made by a trustee of land or a beneficiary with an interest in property subject to a trust of land. The court has a broad discretionary range of powers to make orders regarding the exercise of the trustees’ functions or to the nature and extent of beneficiaries’ interests, including a sale or postponement of sale.
Beneficial interests are determined and declared under established principles of trust law.
In Jones v Kernott the Supreme Court held, inter alia, that the following principles apply:
the starting point where a family home is bought in joint names is that they own the property as joint tenants in law and equity
that presumption can be displaced by evidence that their common intention was, in fact, different, either when the property was purchased or later
common intention is to be objectively deduced (inferred) from the conduct and dealings between the parties
where it is clear that they had a different intention at the outset or had changed their original intention, but it is not possible to infer an actual intention as to their respective shares, then the court is entitled to impute an intention that each is entitled to the share which the court considers fair having regard to the whole course of dealing between them in relation to the property
each case will turn on its own facts; and
financial contributions are relevant but there are many other factors which may enable the court to decide what shares were either intended or fair
TOLATA 1996, s 15 requires a court to consider a checklist under TOLATA 1996, s 14, to include:
the intention of the trust creator or creators
the purposes for which the property subject to the trust is held
the welfare of any minor
the interests of any secured creditor
Proceedings are commenced in either:
the High Court (Chancery or Family Division)
the county court for the area in which the property is situate, or where the defendant to the application resides
The court has power under the Civil Procedure Rules 1998 (CPR 1998) Part 30 to transfer between courts and between divisions.
Part 8 of the CPR 1998 is used where the court’s decision is unlikely to involve a substantial dispute of fact and where a property is owned by cohabitants in joint names. For example the other party refuses to sell the home.
CPR 1998, Part 7 procedure should be used if there is likely to be a substantial dispute of fact. Many courts require the proceedings to commence as a Part 8 claim and to then continue as a Part 7 claim. Enquiries should be made of the court of issue. The claimant’s statement of case must be filed with the claim.
On or after issue of a claim form the applicant may seek an injunction to prevent disposal of the property. The principles in CPR 1998 Part 25 should be followed.
Occupation of the family home
The Family Law Act 1996, Pt IV governs rights to apply for occupation orders. Beneficiaries have rights of occupation under TOLATA 1996. If a claimant establishes a beneficial interest in the property, the court may determine the occupational rights that result under the trust. The parties may have contractual or other equitable rights that confer a right of occupation. If an applicant fails to establish a beneficial interest in a property or a statutory right to occupy, they may demonstrate a contractual licence to remain there resulting from the property owner’s conduct.
While the parties live together, the owner gives the other a licence to occupy their home. If no consideration is given, then if the relationship breaks down, the owner may recover exclusive possession by giving the other notice to quit. If the licensee has given up a right or suffered detriment to live with the owner, a contractual licence may be established enabling:
the occupant to remain at the property for life or while the property is needed to care for children of the relationship, or
the occupant to remain subject to reasonable notice, so that immediate possession will not be provided.
A licence by estoppel may also arise if the property owner leads the other to believe that the right of exclusive possession will not be enforced and the other acts to their detriment in reliance on such a promise.
Rights of occupation against third parties
If the contractual licence gives rise to an interest under a constructive trust, it will be enforceable against a purchaser of the family home provided the purchaser has notice of the licence or if it constitutes an overriding interest.
A non-tenant cohabitant who is deserted, or where their partner defaults on rent payment, is not entitled to remain in possession of the family home and should enquire whether the landlord is prepared to accept rent.
If the mortgage is in the name of one cohabitant only, the other cohabitant has no contractual obligation to the mortgagee. Where the cohabitant borrower defaults on mortgage payments, the other cohabitant could ask the court to adjourn possession proceedings to enable them to find alternative accommodation, or to offer payment to the lender.
A minor cohabitant who has occupied a property and lived with a bankrupt when the bankruptcy petition was presented may establish limited rights of occupations for a year.
Married Women’s Property Act 1882, s 17
The Married Women's Property Act 1882, s 17 enables a court to declare ownership of real and personal property, and to order or postpone a sale. Injunctions can be obtained to preserve or detain property.
It applies to formerly engaged couples and parties who separate and do not divorce, or to those who divorce and remarry quickly. The courts discourage applications under s 17. It does not apply to property disputes between cohabitants. TOLATA 1996, s 14 and the Law of Property Act 1925, s 188 must be used instead by cohabitants.
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