Trust Deeds & Co-Ownership

A Trust Deed or Declaration of Trust is a legally binding document recording individual contributions to the purchase price and / or how the net sale proceeds are to be split on eventual sale. It is helpful to clarify what happens on sale if the Buyers should separate and it is not amicable.

A Trust Deed can be used in many circumstances. For example, when property is held on behalf of someone else, or where, for Tax reasons the equitable ownership needs to be 99% in favour of one party and 1% for the other.

Please Note

As Conveyancers cannot give Tax or Financial advice, (this is outside of their expertise and they are not regulated for this), you should obtain professional advice before proceeding with a binding Trust Deed.

Co-Ownership / Joint Owners

If one party is investing significantly more money in the property it is advisable to have a Trust Deed prepared. This will provide certainty as to the parties intentions and can be relied upon in any future legal proceedings. The Deed will make clear who gets what on eventual sale after payment of legal fees, disbursements, estate agents fees and mortgage repayment.

Registration at Land Registry

While Trust Deeds themselves are not sent to Land Registry and registered, the existence of the Trust Deed is protected by an entry (restriction) on your deeds (office copies of registered title). This ensures that on resale or remortgage the Conveyancer is aware of the Trust Deed and adheres to its terms of conditions.

Additional Legal Costs

A Trust Deed, or Declaration of Trust, is additional to your conveyancing matter and will require a further legal fee and it should be protected by registration of a restriction on the property deeds. The deeds are the office copies registered at HM Land Regustry. The restriction is registered at the same time as the purchase so the Trust Deed needs to be drafted, approved and signed before completion occurs.

Related Blogs

See also my Co-Ownership article covering Joint Ownership and Tenants in Common.

Wills and Intestacy

You should also consider having a Will drafted when you own property. If you pass away without a Will your estate and assets are subject to intestacy law. This means your assets may not go to those you want them to.

Whether you are married, or not, it is important to consider having a Will.