Are you buying a property with someone else or making a contribution towards someone else’s purchase? Laura Wilkinson of AMD Solicitors offers some advice.
It is increasingly common nowadays for parties to enter into a joint venture to buy a property either in joint names or with a contribution from a third party who will not be a legal owner and whose interest in the property is not being protected with a mortgage.
If you are intending to enter into such an arrangement you should consider making a Declaration of Trust at the time of the purchase.
What is a Declaration of Trust?
A Declaration or Deed of Trust is a legally binding written agreement between parties setting out the agreed arrangements between them as to the ownership of the property.
Why should you make a Declaration of Trust?
If you are joint owners who have agreed to contribute different amounts to the purchase of the property or you are a third party contributor a Declaration of Trust can record matters such as:
- The background or reasons for the arrangement.
- The percentage of the deposit you have each contributed.
- The percentage of the property each party will own.
- The division of responsibilities for mortgage payments or repairs.
- The arrangements for one party to buy the other’s share.
A restriction is also usually entered against the legal title to the property at HM Land Registry ensuring that the property cannot be sold unless the sale is in accordance with the terms of the Declaration of Trust.
In the event of the sale of the property or if a dispute arises between the parties a Declaration of Trust will help protect the parties financial contributions by clarifying their original intentions when they entered into the arrangement and will reduce the chances of prolonged costly legal disputes.
AMD Solicitors specialist residential property team will be happy to advise you on the options available to you and prepare a Declaration of Trust for you at the time of your purchase to protect your interests.
For advice on all Property Law issues contact Laura and her property team at 15 The Mall, Clifton, Bristol BS8 4DS, by telephone on 0117 9744100 or email firstname.lastname@example.org. AMD have offices at Clifton, Henleaze, and Shirehampton.