Mediation in Claims Involving Co-Ownership and TOLATA

Introduction

I've been tasked with a bit a research so this week I've been looking in more detail at disputes between co-owners of property can be some of the most emotionally charged and financially draining forms of litigation. Whether between former partners, family members, or business associates, disagreements about who owns what share of a property — and who has the right to live there or receive sale proceeds — often escalate quickly.

Under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA), such disputes are typically resolved in the civil courts. However, court proceedings under TOLATA are often costly, lengthy, and adversarial. Increasingly, parties and their advisors are turning to mediation as a more constructive, flexible, and cost-effective way to resolve co-ownership disputes.

This blog explores how mediation works in TOLATA claims, why it is so effective, and what practical steps parties can take to prepare for a successful mediation.

1. Understanding TOLATA and Co-Ownership Disputes

Before looking at mediation, it helps to understand the legal framework behind co-ownership claims.

What is TOLATA?

The Trusts of Land and Appointment of Trustees Act 1996 (commonly known as TOLATA) governs disputes where land is held on trust — usually arising when two or more people own a property together. It allows the courts to determine:

• Who owns what share of the property (the beneficial interest).

• Whether a property should be sold and, if so, how the proceeds should be divided.

• Who has a right to occupy the property and on what terms.

TOLATA replaced the old doctrine of “trusts for sale” with a more flexible regime that recognises the practical realities of co-ownership. It applies to both domestic and commercial contexts, though the vast majority of claims involve domestic property — particularly between separating couples who are not married or in a civil partnership.

Common Examples of TOLATA Disputes

• Former cohabitees disputing ownership of a property after separation.

• Family members who jointly purchased or contributed to a home.

• Investors or business partners with disagreements over investment properties.

• Disputes with third parties such as lenders or creditors claiming an interest.

Often, the property is the main or only significant asset, and emotions run high. The law itself can be complex, relying on principles of constructive trusts, resulting trusts, and proprietary estoppel, which depend heavily on each party’s evidence and intentions.

These factors make TOLATA disputes particularly well-suited to mediation, where parties can explore both legal and personal dimensions of the conflict in a confidential and flexible setting.

2. The Problems with Court Proceedings

While TOLATA provides a route to court determination, litigation is rarely the best way to resolve co-ownership disputes.

Cost and Delay

TOLATA claims often require detailed witness statements, property valuations, and complex legal submissions. Legal fees can quickly exceed the value of the disputed interest, and cases can take 12–24 months or more to reach trial.

Emotional Strain

Because co-ownership disputes frequently involve former partners or family members, court proceedings can deepen emotional wounds. A judge’s decision is binary — someone wins, someone loses — and the process itself often destroys any remaining relationship between the parties.

Limited Flexibility

The court can only determine legal ownership and related issues. It cannot easily craft solutions that meet the parties’ broader needs — for instance, structuring payments over time, agreeing buyouts, or accommodating children’s housing needs.

Judicial Encouragement of Mediation

Recognising these drawbacks, the courts actively encourage parties to mediate. Judges routinely adjourn proceedings or penalise parties in costs for unreasonably refusing to mediate. The message is clear: TOLATA claims should, wherever possible, be settled out of court.

3. Why Mediation Works in TOLATA and Co-Ownership Disputes

Mediation is a voluntary, confidential, and without-prejudice process in which an independent mediator helps parties reach a mutually acceptable resolution.

Key Advantages

a) Confidentiality

Everything discussed in mediation is private and cannot be disclosed in court if the mediation fails. This allows parties to speak openly about concerns, explore settlement options, and make concessions without fear of prejudicing their case.

b) Flexibility

Mediation can cover a broader range of issues than a court judgment. For example, parties can agree:

• One party buys out the other’s share over time.

• The property is sold after a certain event (e.g., children leaving school).

• The parties agree on interim use or rental arrangements.

These creative solutions are often impossible within the rigid framework of a court order.

c) Cost and Time Efficiency

A one-day mediation can often settle a dispute that might otherwise take months or years in court. The cost of mediation is typically a fraction of the legal fees required for a full trial.

d) Preservation of Relationships

Because mediation focuses on communication and collaboration, it helps preserve or at least repair personal relationships — particularly valuable when the parties share children, business interests, or ongoing family connections.

e) Control and Certainty

In mediation, the parties retain control. They decide the outcome, rather than having it imposed by a judge. This often leads to greater satisfaction and higher compliance with the agreed terms.

4. The Mediation Process Step-by-Step

While every mediation is unique, most TOLATA mediations follow a similar structure:

Step 1: Preparation

Each party provides a short position statement, summarising their perspective and what they hope to achieve. Relevant documents (such as title deeds, mortgage statements, or evidence of contributions) are shared in advance.

The mediator reviews these materials to understand the background, identify key issues, and plan the session. Good preparation by solicitors and clients is essential to a productive mediation day.

Step 2: Opening Joint Session

The mediation usually begins with a joint meeting. The mediator explains the process, confirms confidentiality, and invites each party (or their solicitor) to outline their position.

This is not about arguing the case but about clarifying concerns and setting the tone for negotiation.

Step 3: Private Meetings (Caucuses or shuttle mediation)

After the joint session, the mediator meets each party privately. These confidential discussions allow parties to explore their true priorities and options without posturing.

The mediator “shuttles” between rooms, helping narrow the gap between positions and test the realism of proposals.

Step 4: Negotiation and Settlement

Through this shuttle diplomacy, the mediator assists the parties in crafting a practical agreement. This might involve agreeing a valuation, setting sale terms, or determining compensation for unequal contributions.

When agreement is reached, the mediator helps record the terms in a Heads of Agreement or Memorandum of Understanding, which the parties’ solicitors then convert into a binding consent order or formal deed.

Step 5: Post-Mediation

Even if a full settlement is not reached on the day, mediation often narrows the issues, making future negotiations or court proceedings much simpler and less costly.

5. Common Issues Resolved in TOLATA Mediation

Mediation can address a wide range of legal and practical issues, including:

• Ownership shares: Determining who owns what percentage of the property, especially where financial contributions were unequal or informal.

• Sale vs. buyout: Agreeing whether the property should be sold, and on what terms one party may buy out the other’s interest.

• Occupation: Deciding who may remain in the property and for how long.

• Mortgage responsibilities: Allocating ongoing mortgage or maintenance payments.

• Third-party interests: Dealing with contributions or claims by parents, lenders, or investors.

• Timing of sale: Agreeing deferred sale arrangements to accommodate family or financial circumstances.

Mediation allows these issues to be discussed holistically, taking into account emotional, financial, and practical considerations.

6. Preparing Effectively for Mediation

To make mediation productive, preparation is key. Parties should:

1. Clarify Objectives: Identify what really matters — for example, retaining the home, recovering an investment, or achieving closure.

2. Assemble Evidence: Gather financial documents, proof of contributions, and relevant communications.

3. Obtain Valuations: Agree a property valuation or obtain independent appraisals to ground negotiations in reality.

4. Seek Legal Advice: Although mediation is non-adversarial, legal advice ensures proposals are realistic and fair.

5. Keep an Open Mind: The most successful mediations occur when parties approach with flexibility and willingness to compromise.

7. The Role of the Mediator

A skilled mediator is neutral — they do not give legal advice or make decisions. Instead, they facilitate communication, manage emotions, and guide parties towards mutually beneficial outcomes.

In TOLATA disputes, it is especially valuable to use mediators with legal backgrounds or specialist property experience. They can help parties understand the likely court approach and reality-test their expectations, which often helps unlock settlement.

8. Case Study Example (Hypothetical)

Scenario:Alex and Sam, an unmarried couple, purchased a property in joint names. Alex paid the deposit; Sam contributed to renovations and mortgage payments. After separating, Alex wanted to sell; Sam wished to remain.

Court Position:A TOLATA claim would involve complex arguments about beneficial interests and likely cost tens of thousands in legal fees.

Mediation Outcome:Through mediation, the parties agreed:

• A joint valuation of £400,000.

• Sam would buy Alex’s share within six months for £190,000.

• If Sam could not complete, the property would be sold on the open market.

Both parties saved significant costs, avoided months of litigation, and preserved an amicable relationship for co-parenting their children.

9. Conclusion: The Sensible Route Forward

Mediation is not just a “nice to have” in TOLATA and co-ownership disputes — it is often the most practical and financially sensible way forward.

By focusing on communication, flexibility, and mutual respect, mediation empowers parties to take control of their own outcomes rather than surrendering their futures to a judge.

For solicitors, encouraging clients to mediate demonstrates both professionalism and pragmatism. For clients, it can mean the difference between years of stress and a swift, dignified resolution.

As the courts continue to emphasise settlement and proportionality, mediation is becoming the default expectation — not the exception — in co-ownership and TOLATA disputes.