Declarations of Trust
Protect Your Interests in Property Ownership
Key contact
A Declaration of Trust, sometimes referred to as a Split Ownership Agreement or Split Agreement, is a legal document that records howownership of a property is shared between two or more people.
Whether you are buying a property with a partner, family member, friend or business associate, a Declaration of Trust can provide clarity and certainty by setting out each party's financial interest and responsibilities from the outset.
At Healys, our experienced property solicitors adviseclients on preparing tailored Declarations of Trust that accurately reflecttheir intentions and protect their interests.
Contact our team to discuss your property ownership arrangements.
With the current high price of property across the UK, a lot of people are now opting to purchase property jointly with a family member, friend or partner. Depending on how the property is jointly held however, shares in the property may not always be split equally. Where this is the case parties should have a declaration drafted confirming and protecting their respective interests.
What is a Declaration of Trust?
A declaration of trust sets out the proportions of a property owned by 2 or more individuals. It confirms that the property is jointly held on trust for themselves as tenants in common, and sets out their specific shares.
Why do I need a declaration of trust?
There are two ways of owning property jointly; as “joint tenants” and as “tenants in common”, and each form of ownership is very different.
Joint Tenants each own a property equally, with undivided shares. If sold, the proceeds of sale are divided into equal shares, regardless of respective contributions to the purchase price. A share in a property under this form of ownership is unquantified and cannot be left to someone in a will; on the death of one co-owner, the other automatically absorbs the deceased’s share in the property.
Tenants in Common, on the other hand, own a specified share in the property. Your shares may be equal but they do not need to be. If the property is sold each co-owner will receive a part of the proceeds of sale proportionate to their distinct share. On the death of one of the owners, their share in the property is distributed in accordance with their Will, or the legal rules which determine where an estate passes in the absence of a Will.
If you wish to hold a property as tenants in common, it is important that you sign a declaration of trust in order to avoid future uncertainty. The declaration of trust will formally record the specific shares held by the co-owners, based on their contributions to the deposit, the mortgage and ongoing maintenance. If the property is sold, the document can be referred to in order to ascertain and calculate your entitlement to any sales proceeds.
How We Can Help
Our solicitors can assist with:
- Preparing Declarations of Trust for residential properties
- Split ownership arrangements between co-owners
- Property ownership between unmarried couples
- Buy-to-let and investment property arrangements
- Recording unequal financial contributions
- Protecting deposits and inheritance contributions
- Property ownership between family members
- Advice on tenants in common arrangements
- Reviewing and updating existing Declarations of Trust
- Resolving disputes relating to beneficial ownership
What Is a Declaration of Trust?
A Declaration of Trust is a legally binding document thatrecords the beneficial ownership of a property.
While the legal owners are registered at the Land Registry,a Declaration of Trust sets out the underlying financial interests of theparties involved. This can be particularly important where owners havecontributed different amounts towards the purchase price, mortgage payments orongoing property costs.
The agreement can specify:
- Each owner's share of the property
- How sale proceeds should be divided
- Responsibility for mortgage payments and expenses
- How future contributions will be treated
- What happens if one party wishes to sell
- Arrangements following changes in circumstances
By clearly documenting these arrangements, a Declaration ofTrust can help avoid misunderstandings and disputes in the future.
When Should You Consider a Declaration of Trust?
A Declaration of Trust may be appropriate whenever more thanone person has a financial interest in a property.
Common examples include:
- Unmarried couples purchasing a home together
- Couples contributing different amounts towards a deposit
- Parents contributing funds towards a child's property purchase
- Friends buying property jointly
- Investment property purchases
- Family members investing in property together
- Situations where ownership shares are intended to change over time
Having a formal agreement in place provides transparency andhelps ensure all parties understand their rights and obligations.
Protecting Unequal Contributions
It is increasingly common for one party to contribute moretowards a property purchase than another.
For example, one owner may:
- Provide a larger deposit
- Contribute inherited funds
- Make higher mortgage payments
- Fund substantial renovation works
Without appropriate documentation, disputes can ariseregarding each person's entitlement when the property is sold.
A Declaration of Trust can record these contributions andestablish how proceeds should be divided, helping to protect the interests ofall parties involved.
Declarations of Trust for Unmarried Couples
Unlike married couples and civil partners, unmarried couplesdo not automatically benefit from certain legal protections regarding propertyownership.
A Declaration of Trust allows couples to formally recordtheir ownership arrangements and financial contributions, providing greatercertainty should circumstances change in the future.
This can be particularly important where:
- One party contributes a larger deposit
- Ownership is intended to be unequal
- Family members have contributed funds
- Future contributions are expected to differ
Reviewing Existing Arrangements
Property ownership arrangements can evolve over time.
You may wish to review or update an existing Declaration ofTrust if:
- A property is refinanced
- Additional funds are invested
- Ownership shares change
- A relationship changes
- One owner wishes to buy out another's interest
- New owners are added to the property
Our solicitors can review your existing arrangements andadvise whether amendments are required.
Property Ownership Disputes
Where disagreements arise regarding ownership shares orfinancial contributions, early legal advice can help clarify the parties'positions and identify a practical solution.
We advise clients on disputes involving:
- Beneficial ownership claims
- Property sale disagreements
- Co-owner disputes
- Unmarried couple property disputes
- Disputes relating to financial contributions
- Trusts of land claims
Our team will work to protect your interests and helpachieve a resolution as efficiently as possible.
Why Choose Healys?
Healys provides clear, practical advice on propertyownership arrangements for individuals, couples, families and investors.
Our solicitors understand the importance of documentingownership correctly from the outset and can prepare tailored agreementsdesigned to reflect your specific circumstances.
Our expertise includes:
- Declarations of Trust
- Residential property transactions
- Joint ownership arrangements
- Property investment structures
- Estate planning and wealth protection
- Trusts and succession planning
- Property-related disputes
Speak to a Solicitor
Whether you are purchasing a property, investing withothers, or wish to formalise existing ownership arrangements, our experiencedsolicitors can help ensure your interests are properly protected.
Contact Healys today to discuss a Declaration of Trust andyour property ownership requirements.
