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Declarations of Trust recommended for joint property purchasers

It is not uncommon for unmarried couples, family members, friends or business partners to purchase a property together and to make unequal contributions to the purchase price.  In these circumstances the preparing of a Declaration of Trust will provide clarity and may help to avoid disputes in the future in the case of death, relationship breakdown or sale of the property.

The main issues covered in the Declaration of Trust are:

Unequal contributions

The Declaration of Trust sets out the respective contributions of the parties and how the proceeds are to be split in the event of a sale of the property or a dispute between the parties.  This can be done by reference to a percentage figure, for example 60/40 or 70/30 or alternatively the Declaration of Trust could provide that one party is to receive a fixed sum because that party has, for example, paid the deposit on the purchase price.  The balance of the net proceeds of sale can then be split either equally or unequally between them depending on the contributions that they have made and the terms of the Declaration of Trust.  If the Declaration of Trust is prepared on the basis of a fixed sum then this provides certainty that it will not take into account any fluctuations in the house price.

Mortgage payments

Frequently parties purchasing a property need the assistance of a mortgage and in those circumstances a Declaration of Trust can specify whether or not the contributions to the mortgage payments are to be equal or not.  The same applies to any other outgoings on the property.

Option to purchase

The Declaration of Trust will generally include an option to purchase so that if any other parties wish for the property to be sold or to acquire the other party’s interest they will have an option to purchase and to keep the home.  The Declaration of Trust can provide that in the event that the value of the share cannot be agreed between them that an independent surveyor is appointed to determine the price.

Parental contributions

More and more young people look to their parents to assist them with the purchase of a property and a Declaration of Trust can be used to protect the contribution made by the parents.  As with contributions made by the parties themselves, parents may wish to take a percentage of the net proceeds of sale or to have their interest protected by reference to a fixed sum of money.

Sometimes it is difficult with regard to timescales or physical location of the parties for a full Declaration of Trust to be entered into.  The Land Registry has recently introduced a “Form JO” as an alternative means for joint owners to declare their interests or to provide details of an existing separate Declaration of Trust.

The existence of a Declaration of Trust and/or a third party’s interest in the proceeds of sale can be protected by the registration of a restriction at the Land Registry.

In the absence of any contrary indication, the Land Registry will register joint owners as tenants in common with a presumption that they have an equal separate share in the property.  Therefore if this is not the situation or the wishes of the parties then this does need to be expressly set out

If you are considering buying a property with a partner, friend or relative and would like advice contact Alan Williams, Head of Residential Conveyancing at Gullands Solicitors, Maidstone by email: or phone 01622 689790.

Alex Astley at Gullands is an expert in Declarations of Trust. Alex’s email address is