What is a Declaration of Trust? Do I need one?

Many couples buy property together.

However, more often than not and in particular with unmarried couples, the question of how the beneficial interest of the property will be held can go without proper consideration.

In almost all transactions there is a difference in contributions towards the purchase price, costs and stamp duty land tax. For many, buying a property is the biggest financial commitment they will ever make. So why do so many people negate to consider protecting their financial interest?

Declaring interests at the outset of a transaction provides clarity about the party’s intention and help many avoid disputes, should there be a relationship breakdown and/or sale of the property required in the future.

Purchasing Property basics

As a brief refresher of the basics – when property is purchased in joint names, the legal estate of the property will be held as joint tenants and the beneficial interest in the property as either joint tenants or tenants in common.

In short; Tenants in Common means that each of the co-owners own a specific share interest in the property. In contrast, Joint Tenants jointly own the whole of the property rather than a specific share.  (For more information on Joint Tenant V’s Tenants in Common means – see our post on this matter here).

The need for a declaration of trust

Many fail to define how the contributions made at the time of purchase or subsequently, reflects how the property is intended to be owned.

Most disputes occur between unmarried co-owners on the breakdown of the relationship when deciding what they each will receive out of any net proceeds of sale (NB – it is not just couples, disputes also arise between family members, business partners or friends who purchase property together).

The simplest method of recording whether the partied intend to own the property in equal or in unequal shares is to make an express declaration to that effect.

A declaration of trust between assists co-owners establish who owns what and what will happen in the event that the property has to be sold.

It can be even more important to draw up a Declaration of Trust when somebody has contributed towards the property but is not named on the title deeds, to protect their interest.

The purpose of the declaration is to safeguard both parties by making it clear at the outset how the property was funded and how the division of sale proceeds will be dealt with.

Types Of Property Law Covered By Meaby&Co



A Declaration of Trust can clarify:

  • The percentage of the deposit each person will pay;
  • The percentage of the property each person will own;
  • How much each owner will contribute towards mortgage payments;
  • How much each owner will contribute towards

How soon is too soon?

To all those buying property with another, we recommend that the intention and/or any agreement as to how the parties are to hold the property is addressed from the outset, to avoid any confusion in the future, should the property or a parties interest need to be disposed of (for whatever reason).

Already purchased the property? If however, you have already purchased a property without taking the above into consideration, a declaration can still be drawn up, provided the co-owner agrees. In this circumstance, we recommend that you seek independent legal advice at the earliest convenience so that you can understand what options may be available to you, should you consider that you may need to sell the property and/or your share at some point in the future.

Conclusion on Declaration of Trust

Failing to prepare is preparing to fail.

A declaration can be swift, easy and finalised before completion. Preparing an agreement at the outset will not only avoid potential disputes it can save you a lot of money and costs should a dispute arise.

We advise on purchasing the property, how to hold the interest in a property, drafting declarations of trust, post-purchase agreements, co-ownership disputes and/or mediation and litigation.

For queries relating to property ownerships, disputes, dispute resolution, co-ownership disputes or general litigation matters Aileigh Brough at Meaby&Co on abrough@meaby.co.uk or call 020 7703 5034.

Contact One Of Our Property Solicitors Today

If you are buying or selling a property, please contact Laura Sentkovsky at Meaby&Co for advice: lsentkovsky@meaby.co.uk or call 020 7703 5034.

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