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Declarations of Trust
Declarations of Trust are vital for many who are buying a property jointly with someone else. A Declaration of Trust is a legally binding document detailing the financial interests of joint owners in a property. Legally this is known as the beneficial ownership in the property, as opposed to the legal ownership of a property. A Declaration of Trust is used where more than one person is involved in buying or investing in a property and the Deed seeks to set out the clear contributions and responsibilities of all parties concerned in the transaction. If you are co-owner or are contributing to a purchase, for example by helping your children or your parents then you will want a Declaration of Trust. We have a number of experts who can guide and advise you on the possibilities of a Declaration.
The Declaration can take into account ongoing financial contributions as well as initial contributions such as deposits. It can detail agreements regarding the upkeep, maintenance and repair of the property, how the property will be valued when the property is sold and how the net sale proceeds will be divided upon sale. The Declaration can confirm the circumstances in which the property will be sold. It is an important part of buying a property and a practical part of co-ownership.
The Declaration may cover the following matters:
- The acknowledgement of any third party financial contributions and their right to repayment in given circumstances.
- What happens in the event of the death of a co-owner
- What happens where one co-owner wishes to sell against the wishes of another co-owner or third party contributor
- Agreements between the co-owners in performing their obligations
- Which party is responsible for mortgage repayments, repair, maintenance, costs, or insurance
- The background to the purchase and the contributions made
Preparing a Declaration of Trust will help to protect your interest and avoid potential conflict in the future saving the time and money. If any of the following situations apply to you a Declaration of Trust is particularly recommended:
- You have contributed towards the purchase of the property by your child
- You and your partner are buying a property and one of you has contributed a greater share of capital towards the purchase or will be making unequal contributions to the mortgage repayment
- You have contributed towards the improvement of someone else’s property so the property has become more valuable
- You have loaned money to someone else to enable them to buy a property
- You are buying a share of a jointly owned property for example taking over an ex-partner’s share in a property
- You anticipate letting a property so that a rental income will be divided from it
A meeting may not always be necessary and the other party/parties may need to seek independent legal advice. We prepare many declarations of Trust each year for clients. Our specialist are experienced and have encountered many different circumstances – contact us for initial guidance, advice and a competitive fixed fee.