Basic Declaration of Trust
This product constitutes an easily adaptable pro forma declaration of trust, together with a set of tailored guidance notes which aim to set out how to correctly fill-out the template and explain all significant provisions so as to allow you to put into effect a valid and legally binding declaration of trust.
Declarations of trust, or ‘deeds of trust’, are used in property transactions when two or more people decide to buy a property together as tenants in common, as opposed to joint tenants, i.e. they don’t own the property equally but will have different shares in it which won’t pass to the other co-owner on death. For further information on declarations of trust for UK property, please consult our blog.
Further down the page are our guidance notes relating to this template which you will also receive as a separate document when you buy the product.
Note that this document is not intended for use where tenants in common are changing the percentage of how much of the property they each hold.
- Parties: This deed is drafted on the basis that there are two individuals jointly owning the property, however it can be amended to represent up to four individuals.
- Background: These statements should take into account the individual circumstances of each transaction and should be amended accordingly.
- Declaration of trust: The suggested wording which falls within the set of square brackets around the first paragraph allows the tenants in common to state a specific percentage of their beneficial interests in the property. The included optional wording also allows for severance of a joint tenancy.
The suggested wording which falls within the set of square brackets around the second paragraph (as well as clauses 3, 4 and 5) should be used if the tenants in common wish to set out a way of calculating each person’s proportions (in respect of how much of the property each person owns). Please note that the calculation which has been inserted is a suggestion and can be altered to suit the needs for each set of beneficiaries.
You should further note that the sections which are contained within square brackets at clause 1.1, have been inserted for the purposes of the above mentioned calculation as has Schedule 1.
- Registration: If a declaration of trust is being made after there has been a severance of a joint tenancy, then a form A restriction should be applied for. An application for such a restriction should not be necessary if the parties already hold the property as tenants in common (there should be a restriction on the register already).
If there are limitations which are placed on the trustees’ powers in the declaration of trust, a form B restriction will also need to be applied for.
Note that the registration of the above mentioned restrictions applies to registered land. If the property is unregistered, co-owners could confirm their agreement to endorse a memorandum of the declaration of trust on the relevant lease or conveyance. This should encourage a buyer to be aware of the need to pay purchase monies to all trustees.