Lecture 12 - Statutory Framework: TLATA 1996
All forms of co-ownership create a trust of land.
Background to TLATA:
Before you had a trust to sale, which was a problem because was just a trust to sell the land. Just did not reflect the way people
bought land. People would buy land to sell it. This is what the Law Commission based TLATA on. The problem with the Trust for
Sale is that over time courts manufactured a result where the duty to sell the trust land nevertheless gave the beneficiaries a
right to occupy the land (Bull and Bull) confirmed in Boland. TLATA confirms the way in which we hold land now.
See Law Commission:
Transfer of Land: Trusts of Land (1989)
“The defining feature of the trust for sale, at least as it was originally designed, is that the trustees are under a duty to
sell the trust land. Implicit in this is the notion that this land should be held primarily as an investment asset rather than
a ‘use’ asset”.
Under TOLATA legal co-owners (joint tenants) hold the legal estate as trustees of land.
“Trust of land” (1996 TOLATA, s.1(2)) is defined as any trust “whether express, implied, resulting or constructive”. Any
form of trust relationship creates a trust of land.
TOLATA introduced to reflect societal changes & abolished doctrine of conversion (treated land as if it had already been
converted into money, so worked with trust of sale but not the trust of land).
See section 1 which defines trust of land.
Conceptual design of the trust of land:
A scheme giving trustees of land a power to sell and a power to retain the land would correspond much more closely to the
perceptions of most co-owners. Although many of these owners might be surprised to learn that they are trustees of any kind,
the new system, given its simplicity and the fact that it bases the powers of trustees on those of an absolute owner, should be a
considerably more accessible concept than that of the trust for sale.
Law Commission, Transfer of Land: Trusts of Land (1989)
Here saying we have got rid of the duty to sell. You have a power to sell and a power to retain.
Essentially, we have got rid of the duty to sell, you have a power to sell and a power to retain because that’s the way most
people live their lives. The whole point of TLATA is that it is a code in its own wright, you don’t need to look beyond its
provisions. The key section in TLATA is section 6 in terms of conceptual design.
Section 6 – general powers of trustees:
Says that trustees of land have all the powers of an absolute owner (can sell, mortgage etc.). In exercising those powers though,
they have to have regard to the rights of the beneficiaries. But it doesn’t say that you have to do what they want you to do, just
have regard. Trustees can now resolve issues between beneficiaries (if not the same person).
Powers of trustees:
Trustees of land have ‘all the powers of an absolute owner’ (1996 TOLATA, s.6(1)).
Powers are fiduciary: Trustees must “have regard to the rights of beneficiaries” (s.6(5)) i.e. good faith.
Can terminate trust & partition land – i.e. divide it off (s.7)
Should consult the beneficiaries and give effect to (majority) wishes (s.11(1)-(2))
‘Duty of care’ by trustees (2000 Trustee Act)
Consultation with beneficiaries:
All forms of co-ownership create a trust of land.
Background to TLATA:
Before you had a trust to sale, which was a problem because was just a trust to sell the land. Just did not reflect the way people
bought land. People would buy land to sell it. This is what the Law Commission based TLATA on. The problem with the Trust for
Sale is that over time courts manufactured a result where the duty to sell the trust land nevertheless gave the beneficiaries a
right to occupy the land (Bull and Bull) confirmed in Boland. TLATA confirms the way in which we hold land now.
See Law Commission:
Transfer of Land: Trusts of Land (1989)
“The defining feature of the trust for sale, at least as it was originally designed, is that the trustees are under a duty to
sell the trust land. Implicit in this is the notion that this land should be held primarily as an investment asset rather than
a ‘use’ asset”.
Under TOLATA legal co-owners (joint tenants) hold the legal estate as trustees of land.
“Trust of land” (1996 TOLATA, s.1(2)) is defined as any trust “whether express, implied, resulting or constructive”. Any
form of trust relationship creates a trust of land.
TOLATA introduced to reflect societal changes & abolished doctrine of conversion (treated land as if it had already been
converted into money, so worked with trust of sale but not the trust of land).
See section 1 which defines trust of land.
Conceptual design of the trust of land:
A scheme giving trustees of land a power to sell and a power to retain the land would correspond much more closely to the
perceptions of most co-owners. Although many of these owners might be surprised to learn that they are trustees of any kind,
the new system, given its simplicity and the fact that it bases the powers of trustees on those of an absolute owner, should be a
considerably more accessible concept than that of the trust for sale.
Law Commission, Transfer of Land: Trusts of Land (1989)
Here saying we have got rid of the duty to sell. You have a power to sell and a power to retain.
Essentially, we have got rid of the duty to sell, you have a power to sell and a power to retain because that’s the way most
people live their lives. The whole point of TLATA is that it is a code in its own wright, you don’t need to look beyond its
provisions. The key section in TLATA is section 6 in terms of conceptual design.
Section 6 – general powers of trustees:
Says that trustees of land have all the powers of an absolute owner (can sell, mortgage etc.). In exercising those powers though,
they have to have regard to the rights of the beneficiaries. But it doesn’t say that you have to do what they want you to do, just
have regard. Trustees can now resolve issues between beneficiaries (if not the same person).
Powers of trustees:
Trustees of land have ‘all the powers of an absolute owner’ (1996 TOLATA, s.6(1)).
Powers are fiduciary: Trustees must “have regard to the rights of beneficiaries” (s.6(5)) i.e. good faith.
Can terminate trust & partition land – i.e. divide it off (s.7)
Should consult the beneficiaries and give effect to (majority) wishes (s.11(1)-(2))
‘Duty of care’ by trustees (2000 Trustee Act)
Consultation with beneficiaries:
