How to get your equity out of a property? Section 14 of the Trusts of Land & Appointment of Trustees Act 1996 (TOLATA) & orders for sale

If a property is owned jointly and the co-owners cannot agree on what should happen to the property, then one owner can apply to the court to ask for an order that the property is sold, under section 14 of TOLATA. This is often done as a last resort by cohabitees or unmarried couples, after the relationship has broken down when they cannot agree on what should happen to the property, and one person wants to realise their equity.

How to release your equity from a property?

Section 14 of TOLATA is a useful tool under which the applicant can ask the Court to make an order that the property is sold. In addition to disputes over what should happen to the property, the applicant can ask the Court to give directions as to who should market the property and have conduct of the sale.

When deciding whether to order a sale of the property, the factors that the Court will take into account are:

1. the intentions of the person or persons who created the trust;
2. the purposes for which the property subject to the trust is held;
3. the welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home; and
4. the interests of any secured creditor of any beneficiary.

So, for example, if the parties bought the property to be a family home, but the relationship has broken down, then that is something the Court will take into account. Similarly, if there are children living in the property, then the Court would also weigh up the impact that the sale of the property may have on them.

These types of claims can be complex, and it can be beneficial to seek legal advice at an early stage.  If you feel that you would benefit from some advice on a TOLATA dispute or order for sale, please feel free to contact us at website@anthonygold.co.uk or call us at 020 7940 4060.

Equitable accounting

It is unlikely that the joint owners will have, in the period of solo occupation, contributed equally to the property or been compensated adequately for not having the benefit of occupation. In our second blog, Chris Hatton discusses equitable accounting and considers the Court’s approach to attempt a fair split of the net proceeds of sale.