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Declaration of Trust

Are you buying a property with someone else? You may fit into one of the following categories:

• Co-habiting unmarried couple.
• Co-habiting friends.
• Co-habiting relatives.
• Business partners.

Are you contributing differing amounts to the deposit, fees, or mortgage payments? If so, you need a Declaration of Trust to clarify:

• The percentage of the deposit each person will pay.
• The percentage of the property each person will own.
• How much each owner will contribute towards mortgage payments.
• How much each owner will contribute towards fees.

Have you ever thought about what will happen if you want to sell the property? Have you given any thought as to what will happen to the property if there is a relationship breakdown or if one party simply wants to sell up? You need a Declaration of Trust to clarify:

• What happens if an owner decides to sell their share.
• What proportion of the equity each owner will receive if the property is sold.

What is a Declaration of Trust?

A Declaration of Trust is a legally binding written agreement which records the financial arrangement between the joint owners. Here are some top tips as to why you should make a Declaration of Trust:

Are you contributing a large share of the deposit for the property?
A Declaration of Trust can help you protect your financial contribution in the event that you decide to sell the property or your share in the property.

Are you contributing towards purchase expenses, such as legal fees, stamp duty or removal costs?
A Declaration of Trust can set out your financial contribution and specify how you wish to be repaid in the event that the property is sold.

Are you making contributions towards the mortgage?
A Declaration of trust can set out how you wish to contribute to mortgage payments and how you wish to be repaid for your contribution, should you come to sell the property.

Have you considered any mechanism for buying out your joint owner's share in the property?
A Declaration of Trust can specify the terms upon which you transfer the property.

Do you want to avoid prolonged legal disputes over finances if your relationship breaks down?
Arrange for a Declaration of Trust to be drawn up immediately.