Tolata Flashcards
TOLATA
The trusts of land appointment of trustees act 1996
Power of trustees - Section 6
Section 6 essentially states that trustees have all the powers of an absolute owner e.g. powers of sale, leasing, mortgaging
When exercising their powers:
> Section 6(5) - the trustees must have regard to the rights of the beneficiaries &
> Section 6(6) – must not act contrary to any rule of law or equity
Restriction on powers of trustees - s.10 and 11
Section 10 - consent
> an expressly created trust can impose a requirement for consent from named parties to dealings with the land
Section 11 - consultation
> There is a duty on trustees to consult with adult beneficiaries entitled to an interest in possession
* so far as practicable
* giving effect to the wishes of majority by value - so far as those wishes are consistent with the general interest of the trust
A beneficiaries right to occupy - s.12
A beneficiary with an interest in possession has A RIGHT TO OCCUPY the trust property
Section 12
> The right arises if:
> The purposes of the trust include making the trust land available for occupation
> OR
> the T’es hold the land so as to be available
> AND
> The land is suitable for occupation
Opportunity to exclude beneficiaries - s.13
Where 1+ beneficiaries are entitled to occupy, the Trustees can exclude 1 or more but not all of the beneficiaries
They:
> s.13(2) - must act reasonably
> s.13(4) - taking into account the matters set out in s.14
> s.13(1) - can’t exclude beneficiaries already in occupation
> s.13(3) - Trustees can impose reasonable conditions on the occupying beneficiaries
> s.13(6) - an occupying beneficiary may be required to pay compensation to an excluded beneficiary
s.14 - Application the court in event of disputes AND types of disputes that court deal with
s.14(1) - who can ppply for a court order?
> Any person who is a trustee of land
> OR has an interest in property subject to a trust of land
s.14(2) - orders the court can make:
> the exercise by the trustees of any of their functions
> declaring the nature or extent of a person’s interest in property subject to the trust
TYPES OF DISPUTE THAT COURT DEAL WITH:
> A dispute between trustees over whether or not to sell the trust property
> A dispute because one or more beneficiaries want to prevent or force a sale of trust property
> An application by secured creditors to try and force a sale
> An application by a trustee in bankruptcy to try and force a sale
s.15 - Matters the court must consider in determining an application
s.15(1):
> the intentions of the person or persons (if any) 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, and
> the interests of any secured creditor of any beneficiary.
S.15(2) - in occupation disputes:
> wishes of each of the beneficiaries who is (or apart from any previous exercise by the trustees of those powers would be) entitled to occupy the land under section 12.
s.13(3) - in other matters:
> the wishes of the majority, by value, of B’s who are of full age and are entitled to an interest in possession
s.15 cases
Mortgage Corporation v Marsha Shaire [2001] Ch 743
Bank of Ireland Home Mortgages Ltd v Bell [2002] 1 FLR 809
Fred Perry (Holdings) Ltd v Ivan Genis and Ayelet Haim Genis (2014) Ch D
Application for sale by a trustee in bankruptcy
Remember: bankruptcy automatically severs any beneficial joint tenancy
The trustee in bankruptcy must
> apply to court under s.14 TOLATA
> then court will apply the criteria in s.335A Insolvency Act 1986, not those in s.15 TOLATA
