Can A Personal Representative Bring A Claim Under The Trust Of Land And Appointment Of Trustees Act 1996?
The Trust of Land Appointment of Trustees Act 1996 (TOLATA) determines claims in respect to beneficial ownership of a property and associated issues such who owns what and whether a property should be sold.
But what happens when one of the relevant parties dies?
The estate can defend a claim
a) that a property belonging to the deceased should not fall (100%) inside the estate
b) under the Inheritance (Provision for Family and Dependents) Act 1975 which can allow the clawback of property which has fallen outside the estate if held as joint tenants
You would usually see TOLATA and Inheritance Act claims bought against the Estate in the alternative – this happened in the case of Bhusate v Patel and others (2018) which we discussed in our previous blog.
But can a personal representative of an estate actively bring a claim against another party to force the sale of a property which is required to pay fees, tax and be distributed under the terms of a will or the rules of intestacy?
Trusts of Land and Appointment of Trustees Act 1996
Section 14(1) of the TOLATA 1996 states
‘Any person who is a trustee of land or has an interest in a property subject to a trust of land may make an application to the court for an order under this section’
Section 18 however clarifies that’s
‘The provisions of this Part relating to trustees, other than sections 10, 11 and 14, apply to personal representatives…’
So the answer is no
The alternative is for the personal representatives to make an application under the Civil Procedure Rules 64 where a court can be called upon to determine any question arising in the administration of the estate – including whether in the circumstances a property wholly/partially in the estate should be sold
The personal representative can at the same time ask for a Beddoe order in which the court endorses any proposed action
Claims involving beneficiaries
The above scenario is in respect of disputes between the estate and third parties. The position is different if beneficiaries are involved
A beneficiary does not have an automatic right to occupy a property in the estate (unless they have been given specific rights to do so in the will or it was the purpose envisaged by any will/trust (section 12 of TOLATA 1996)
The personal representatives have a discretion to allow a beneficiary to occupy a property but will face criticism if there are other beneficiaries’ interests which need to be balanced.
A court however could allow one of the beneficiaries to have the right of first refusal in any sale of the property
If a beneficiary refuses to leave the property then the personal representatives should be able to issue proceedings for possession of the property in the normal way
Although what we then see is some other reason why the beneficiary is entitled to stay – for example they were made promises by the deceased that they would be able to occupy the property for the rest of their life
Final Words
Personal representatives have fiduciary duties to administer the estate appropriately which includes collecting in assets and making appropriate distributions to beneficiaries
Whilst they may have no choice to defend any proceedings against the estate, it is much harder to justify legal costs to actively bring a claim.
These should not be embarked on lightly and either endorsement from the court should be obtained or at least an indemnity from the beneficiaries after it has been determined the reward outweighs any risk of such steps.
If you would like legal advice about the roles of personal representatives in property disputes under TOLATA 1996, their limitations, and alternative legal options for estate management, call our dispute resolution experts on0330 822 3451 or request a callback.
