Do I need a Declaration of Trust when buying a home?

You don't have to have a Declaration of Trust when you buy a home with another person. But you might want to think about getting one.

Buying a new home with your partner can be both exciting and stressful. You need to find a place you both love, apply for a mortgage, and decide how to split ownership - 50:50 or different percentages.

No one buys a home thinking they'll break up. But planning for all possibilities makes good sense. When you agree from the start who gets what if you split up and sell, you make a difficult situation clearer. A Declaration of Trust makes everything even more clear.

What is a Declaration of Trust?

A Declaration of Trust (also known as a Deed of Trust) is a legal document that a solicitor usually creates when unmarried people buy property together. It clearly states in writing how much of the property each person owns.

You and the other buyers decide how to split ownership. Most people consider factors like how much each person paid toward the deposit and how much each will contribute to the mortgage payments.

Why would I need a Declaration of Trust?

While not essential when buying property with someone else, a Declaration of Trust helps if your relationship ends or you decide to sell. If one person puts more money into the deposit, a Declaration of Trust can ensure they receive a larger share of the profits when you sell the property.

For example:

• If you buy a property for £200,000 and you both put in £10,000 for the deposit and split the mortgage equally, once paid off, you would each own £100,000 of the property.
• But what if one of you contributes £30,000 and the other contributes £10,000 to the deposit? With a Declaration of Trust, the person who paid more can specify that they should get a larger percentage of the returns when sold.

If you later separate, the Declaration of Trust supports the claim that the person who contributed more should receive a larger share of the money from selling the home.

Does a Declaration of Trust need to be registered at the land registry?

No, you don't need to register a Declaration of Trust with the Land Registry. However, you can choose to register it if you want to. Registering your Declaration of Trust adds extra protection by making sure the property can only be sold when everyone named in the declaration agrees.

If you decide not to register it, the terms of your Declaration of Trust stay private between you and the other property owners.

How long does a Declaration of Trust last?

A Declaration of Trust lasts for as long as you need it to and doesn't have an expiry date. It stays valid until:

• you sell the property,
• both owners agree to change it, or
• a court decides to set it aside.

If your circumstances change - perhaps you get married, have children, or one person pays off more of the mortgage - you might want to update your Declaration of Trust.

While these property ownership agreements can potentially last forever, it's always wise to review them when big life changes happen.

Can a Declaration of Trust be challenged?

Yes, a declaration of trust can be challenged. This important legal document shows who owns what share of a property, but it's not set in stone. People can challenge it if:

• they think it's unfair,
• they were forced to sign it, or
• they didn't understand what they were signing.

Courts take these challenges seriously and will look at all the facts. If you're making a Declaration of Trust, make sure everyone truly agrees and understands it.

If you're worried about a Declaration of Trust you've already signed, talking to a solicitor is a good first step. They can help you understand your rights and options when it comes to property ownership disputes.

Where can I get a Declaration of Trust?

You can contact a solicitor to create a Declaration of Trust for you. Though you may need to pay a fee, they’ll make sure that the document will hold up in court.

You can write your own, but it may not protect you as well.

While a Declaration of Trust isn't the only thing courts consider if you split up, it can make a complicated situation much simpler.

How much is a Declaration of Trust?

You'll typically pay between £100 to £1,000 (but possibly more) for a Declaration of Trust in the UK. The price depends on how complex your situation is, which solicitor or conveyancer you choose, and what specific arrangements you need to include in your trust.

Simpler arrangements cost less, while more detailed agreements with multiple parties or complicated financial splits will push you toward the higher end of the price range.

Many homeowners find this expense well worth the peace of mind that comes with having your property ownership clearly documented and legally protected!