Trusts of Land and Appointment of Trustees Act 1996

The Trusts of Land and Appointment of Trustees Act (TOLATA) 1996 is an Act of Parliament of the United Kingdom, which altered the law in relation to trusts of land in England, Wales, Scotland and Northern Ireland.

Background

TOLATA came into force on 1st January 1997 and was a result of a recognised need for reform in the part of the Law of Property Act 1925 which dealt with trusts. Some problems included the fact that it was hard to establish a trust without it coming under the auspices of the Settled Land Act 1925, which brought with it a range of problems. In particular, the co-owners of property were regarded as having beneficial interests in money and not in the land. Problems arose where partners disagreed over when they wanted to sell a property - usually in the case of separation, and this led to situations where spouses and children might find themselves homeless.

One of the key features of TOLATA was to try and redress the problem above by the imposition of statutory considerations which had to be taken into account when dealing with the disposition of trusts and ordering a sale of the family home.

Requirements

Particularly notable requirements come from two parts of the legislation, firstly section 14 and more importantly 15, where the requirements for consideration in determining applications are dealt with. Secondly, the imposition of section 335a in the Insolvency Act 1986.

Section 15

1. The matters to which the court is to have regard in determining an application for an order under section 14 include -
1. the intentions of the person or persons (if any) 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 interest of any secured creditor of any beneficiary.

Insolvency Act 1986, S. 335a

(3) Where such an application is made after the end of the period of one year beginning with the first vesting under chapter IV of this part of the bankrupt's estate in a trustee, the court shall assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt's creditors outweigh all other considerations.

Case Law

In 2001, in the Case of Re Shaire, Neuberger J assessed the requirements of TOLATA in the light of the case before him and stated that the statute had intended "to tip the balance somewhat more in favour of families and against banks and other charges", when assessing a claim.

External links

* [http://www.opsi.gov.uk/Acts/acts1996/ukpga_19960047_en_1 Statute full text]
* [http://www.number7.demon.co.uk/acts/trusts/land/indexes/toc.htm Commentary by Roger Horne]