What is a declaration of trust?
A declaration of trust an agreement between people, which sets out how they are to hold the beneficial interest in a property (or any asset). For example, they can hold the property equally, or 75% to one person and 25% to another person.
It can take into account initial contributions or deposits paid which can be repaid back in the case of separation. It can take into account mortgage payments i.e. if one person is going to be paying more of the mortgage than the other.
Why would I need a declaration of trust when buying a property?
A declaration of trust can be entered into at the time of purchasing a property (it can be done afterwards). It details the person who paid the deposit and in the event of the relationship breaking down will be repaid back to them when the property is sold.
It can confirm that all outgoings are paid equally, and the mortgage paid equally or unequally and determine how the net proceeds of sale are paid to each party after the return of the deposit.
What could happen if I don’t get a declaration of trust?
If you don’t have a declaration of trust, it will be deemed that you own the property 50-50.