Declaration of Trust
If you want to draw up a declaration of trust, or are considering buying a home with a partner and want legal advice on how best to protect your investment, speak to the experts here at Ukconveyance.
We have, for many years, guided couples through this complicated area of law and can help to ensure that buying a property together is a happy and stress-free experience.
Declaration of Trust Explained
A declaration of trust – also known as a deed of trust – can be used when two or more unmarried parties choose to move in together or decide to live in a property already owned by one of the prospective tenants.
It outlines the proportion of a property that is owned by each tenant, how it was funded, and how the proceeds of a sale will be dealt with in the future. It can also be used to protect the investment of a third party (such as a parent) who is not on the title but has contributed to the purchase of the home.
The document is particularly useful for avoiding disputes relating to the ownership of property if a couple later splits up.
It should include:
- How much of the mortgage is paid by each party
- How utilities and other outgoings will be paid for
- Provisions for children
- A method of valuing the property
- Arrangements in the event of buying each other out
The document should be prepared and signed at the same time as the purchase of a property and before any disagreements have taken place.
It is legally binding and, should a dispute arise, can be produced to demonstrate the original agreement that was in place when the property was being purchased.
As long as all parties are in agreement, the document can be amended, or even waived completely.
Executing the Deed
Executing the deed requires it to be signed, dated, attested by a (preferably independent) witness and then ‘delivered’, which simply means indicating that you intend to be bound by the deed.
Common and Joint Tenants
There are two different ways in which you can own a property jointly, as:
- Joint tenants
- Tenants in common
Property held as joint tenants means each party owns an equal share of the property and has the equal, undivided right to keep or dispose of the property. This also means the property automatically goes to the other owners if you die, and that you can’t pass on ownership of the property in your will.
Property held as tenants in common means that each tenant owns separate and distinct shares of the property. In this case the property won’t automatically go to the other owners if you die, and you are able to pass on your share of the property in your will.