Declaration of Trust

We act for many clients who purchase residential property where a Declaration of Trust is needed to:

• acknowledge the interests of two or more co-owners in the property; or
• acknowledge the interest of a third party who will not be on the title but who has made a financial or other contribution to the purchase which needs to be recorded (and which is not being secured against the property by way of mortgage).

A Declaration of Trust is the framework by which one or more of the following features is addressed:

• Co-owners holding as joint tenants or tenants in common.
• The background to the purchase and individual contributions.
• Individual responsibilities in respect of any mortgage payments, repair and related costs.
• The basis on which the sale proceeds are to be divided in the event of a sale of the property.
• Individual promises between co-owners as to the performance of their individual obligations.
• Provision for contingencies: in the event of the death of a co-owner and/or where one co-owner wishes to sell and the other co-owner(s) does (do) not.
• An acknowledgment as to the contribution of a non-owning third party and the rights of that third party (if any) to require repayment of the contribution e.g. in certain specified events.

The arrangement comprised in the Declaration of Trust is often protected by way of an entry on the title register to the property (as a restriction) so that the property cannot be sold unless a certificate is given that the sale is in accordance with the terms of the Declaration.

Declarations of Trust remain an important aspect of the residential property purchase process and often go hand in hand with specialist tax advice from our Tax and Estate Planning Department.