Co-ownership property disputes are an ever-growing headache for solicitors in the UK.
As of 2024, there are 53% of UK adults who own their own home and joint ownership disputes are becoming more common. And here’s the kicker…
The majority of solicitors are not prepared for the complexity they can involve.
Co-ownership disputes can quickly escalate far beyond a simple property disagreement and solicitors need to be aware of complex issues involving trust law, emotional family dynamics, and the potentially ruinous financial consequences for your clients.
Without the right approach, co-ownership disputes can last for years and cost all involved parties a small fortune.
In this guide, we’ll cover everything solicitors need to know when managing a property disagreement. So, whether you’re a specialist family lawyer or a private client lawyer who occasionally deals with co-ownership disputes, here’s everything you need to know to effectively manage your co-ownership dispute.
What you’ll discover:
- Understanding Co-Ownership Property Disputes
- The Solicitor’s Role in TOLATA Cases
- Essential Steps for Managing Property Disagreements
- Alternative Dispute Resolution Strategies
- Cost Management and Client Protection
Understanding Co-Ownership Property Disputes
Co-ownership property disputes arise when two or more people who own property together cannot agree on key decisions. This can include the sale of the property, the division of proceeds, or occupancy rights.
England and Wales has approximately 3.3 million cohabitating couples and the number is growing year on year. These relationships are on the rise but do not have the same legal protections as married couples.
As a result, when relationships end, property disputes are all but guaranteed.
Relationship breakdown cases are not the only form of co-ownership dispute. We see co-ownership property disputes between family members, friends, business partners, and even parents and adult children.
Your role as a solicitor in co-ownership property disputes is important because these cases require specialised knowledge of trust law and the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA).
The Solicitor’s Role in TOLATA Cases
When clients approach you about a co-ownership dispute, they are not just engaging your legal services. They are also entrusting you with one of the most stressful experiences of their lives.
TOLATA cases are complex creatures that need expert handling and require a solid understanding of both legal and beneficial ownership. Your role involves several key responsibilities that can make or break the case.
Legal Assessment and Strategy Development
Your first duty as a solicitor is to assess the legal merits of your client’s case. This includes a review of who holds legal title, the presence of an express declaration of trust, financial contributions each party made, and the parties’ intentions at the time of acquisition.
The secret to success? Thorough documentation review and evidence gathering from day one.
You are going to need to help; shared ownership solicitors and clients understand the purpose of a TOLATA claim.
Clients come to you with an emotional sense of what is fair, but TOLATA cases are about the legal and beneficial ownership of the property under property and trust law. It’s an essential distinction you must make from day one.
Client Communication and Expectation Management
Co-ownership disputes are highly emotional for clients. It often involves relationship breakdowns, family feuds, or the failure of business partnerships.
As a solicitor, your role includes plain English explanations of complex legal concepts, managing expectations, providing regular updates, and preparing your clients for potential costs and timeframes.
Let’s be honest: A TOLATA trial can take over a year to resolve and cost tens of thousands of pounds.
Essential Steps for Managing Property Disagreements
A structured approach is needed to manage a co-ownership property disagreement effectively. This can set your clients up for the best possible outcome and hopefully to avoid a trial.
Step 1: Gather All Relevant Documentation
Start by collecting every single document related to the property purchase and ownership. This includes the original transfer deed, mortgage documents, bank statements, and any declaration of trust or cohabitation agreements.
Never skip this step. Missing documentation can seriously weaken your client’s position.
Step 2: Assess the Type of Co-Ownership
Determine whether the property is held as joint tenants or tenants in common. This distinction will affect how the property can be sold, what happens upon the death of one owner, and the process for severing joint tenancy if necessary.
Step 3: Calculate Beneficial Interests
If there is no express declaration of trust, then you’ll need to establish beneficial ownership. This is based on: direct financial contributions to purchase price or mortgage, mortgage payments over time, significant improvements, and common intention evidence.
Step 4: Consider All Available Remedies
TOLATA provides several remedies to the court, including:
- Order for sale of the property
- Declaration of beneficial interests
- Regulation of occupation rights
- Appointment of trustees if necessary
Alternative Dispute Resolution Strategies
As of 1 October 2024, court rules now require parties in TOLATA cases to seriously consider mediation before proceeding to court.
If your client declines mediation and is then unsuccessful at trial, they could be ordered to pay the other side’s costs.
ADR is now more important than ever in TOLATA cases.
Mediation Benefits
Mediation has many advantages over court proceedings: it’s usually quicker and cheaper, confidential, non-adversarial, and gives parties control over the outcome.
Negotiation Strategies
Sometimes solicitor to solicitor negotiation can achieve a settlement without formal ADR. Key negotiation tactics include clear evidence presentation, property valuation, structured buyout offers, and strategic time pressure.
Cost Management and Client Protection
TOLATA cases can be expensive and proper cost management is key to protecting your client’s interests.
Funding Options
Help clients understand their legal funding options: After the event insurance, multi-track costs budgeting, conditional fee arrangements, and third-party funding for high-value disputes.
Cost-Benefit Analysis
Before embarking on litigation, do a full cost-benefit analysis: estimate total legal costs, calculate client share, and case strength. Realistic projections protect client from poor decision making.
The brutal truth? Legal costs can outweigh your client’s interest in the property.
Protecting Client Interests
Actively protect your client’s position at every stage of the process: property title notices, continuing mortgage payments, interim applications, and bankruptcy preparation.
Strategic Considerations for Different Dispute Types
The best strategies will depend on the unique facts of each case and the different types of co-ownership disputes.
Relationship Breakdown Cases
Emotions will run high when unmarried couples separate. Fast action is needed to protect occupation rights, consider children’s welfare, and provide clear advice about the differences from divorce.
Family Inheritance Disputes
Property inherited by multiple family members presents a unique set of challenges: complex beneficial interest calculations, multiple parties with different objectives, and emotional attachment to family home.
Investment Property Disputes
Commercial co-ownership disputes are often more adversarial than domestic cases. They often involve different investment strategies between parties, cashflow issues affecting mortgage payments, and market timing factors.
Wrapping It Up
The role of solicitor in a co-ownership property dispute has never been more important with the new rules around mediation in court. Success will depend on your ability to guide clients through these complex cases and to keep costs and expectations in check.
Thorough documentation review from day one is non-negotiable, ADR is now more important than ever due to the new costs rules, a cost-benefit analysis must drive your strategy, different dispute types require tailored strategic approaches, and client communication and expectation management is absolutely crucial.
The co-ownership dispute landscape is constantly evolving and we recommend that you stay up to date with case law developments, practice direction changes, and new ADR techniques in order to best serve your clients.
With proper preparation, a good strategy, and clear client communication, you can help clients navigate these complex disputes and emerge successfully while protecting their legal and financial interests.
