If you’re buying a property jointly but contributing different amounts to the purchase, it may be a good idea to clarify the proportion of ownership at the outset to avoid any potential disputes at a later date and secure your stake in the property.
A Declaration of Trust is a legally-binding document that sets out the shares in which the different interests are held.
Equally, if you have contributed to the purchase of a property but are not named as a legal owner, it’s still possible to be a named party. While only legal owners are able to sell or mortgage a property, a Declaration of Trust can evidence your contribution to the purchase price.
Rogers & Norton can help draw up a Declaration of Trust that agrees the proportions in which a property is owned and the rights and responsibilities each interested party has in relation to it. If one party dies, there is a dispute or the property is sold, for example, a Declaration of Trust can clarify each party’s beneficial interest.
One of our family law solicitors will be able to discuss the potential benefits of having a Declaration of Trust in place. This includes the implications of how marriage or cohabitation will affect your shares and rights in the property should your circumstances change in the future.
A Declaration of Trust is essential in the following situations:
- You are acquiring a home or other property with someone else; particularly with someone other than your spouse
- Your capital contributions are unequal
- You are not married or in a civil partnership
- Contributing to the purchase or improvement of a property in somebody else’s name
An accurately and correctly drawn Declaration of Trust can also help to avoid any issues you may have with Capital Gains Tax, if you are investing in property with others.
Cohabitation Agreement
A Cohabitation Agreement is a much more detailed document than a Declaration of Trust. It can govern how the property is occupied, paid for and disposed of in the future. It can also include arrangements in the event of separation. This is particularly pertinent if children are part of the equation, as this will have a significant impact on the property’s occupation and potential sale of the family home.