Declaration of Trust

[gck303]

Hi,

I wonder if anyone is able to help with this. My girlfriend and I are just about to complete on the purchase of our first house together. The house has been bought in both our names, but the shares of ownership are not equal (75:25).

Our solicitor has just told us that we will need to pay £250 to have a "declaration of trust" drawn up on this since we'll own unequal shares of the property.

Everything that I've read says that we do need to have a declaration of trust but I was wondering if it's possible to save the £250 and do one ourselves - does anyone know if you can get something similar to the 'write your own will' kits in order to do this? Or do we need to pay the £250?

Thanks - any advice much appreciated!

George

[mervyn11]

£250 sounds expensive to me best bet is to shop around as always.
Sorry I cant be more help.

[chant1l]

Don't do it yourself, you will probably get something wrong. Try using an out of town solicitor, newcastle/middlesbrough/hull they will tend to be cheaper esp if you are not there in person. I guess £100/£150 is about right for their time.

[Bossyboots]

Please, please don't do it yourselves. That is a recipe for disaster which could cost you far more than £250 at some time in the future.

This is a specialised document in which each clause must be clear and unambiguous and I don't agree that £250 is too much. You could shop around though and see if anyone will undercut it for you, as long as they don't also cut the quality of the document.

Your deed should also make clear what will happen if one defaults on the mortgage. Will the one who continues paying get credit for that by way of increased equity for example. What if there are unpaid bills. Will future selling costs be split equally or 75:25. You should have all the i's dotted and the t's crossed to save any future problems. There are at least two threads running at the moment where couples did not have a deed of trust and they should give you some idea of how important it is to do this and get it right.

[aimex]

Dont do it!! As far as im aware you can get your shares written into the TR1 Transfer document - this is the document that actually transfers ownership of the land from the vendors to you. There is a box which states how you wish to hold the property - just get the solicitor to tick the box that says tenants in common in unequal shares, and then write down what those shares are, ie. 75:25.

[Herb]

£250 is far too much - £100 -£150 for the solicitors time.

But aimex - if that's the case - then that's brilliant.

[gck303]

Thank you for the responses.

Here is the TR1 document. It does indeed have a section in it defining our proportions of ownership:
http://www.landregistry.gov.uk/asset...uments/tr1.pdf

I have located an example Declaration of Trust here:
http://www.firstrungnow.com/first-ru...trust-deed.php

I guess that the document a solicitor will draw up will be 'more official' and more complete than one prepared by ourselves.

George

[ginandtonic1988]

I'm charging clients £100 + vat for a Declaration of Trust. Its not recommended using the TR1 for defining proportions of ownership.

[aimex]

Why is it not recommended to use the TR1 to define proportions of ownership? It is a legal document and is lodged at the land registry, so why not?

[ginandtonic1988]

Too many TR1s are challenged by law. Its safer to use the Trust Deed as more detail can be put in and so more unlikely to be challenged.

[aimex]

how can the TR1 set out any clearer what their shares are though? how is it open to challenge? sorry, really not seeing it!

[ginandtonic1988]

Sorry trying to be brief and untechnical its a difficult one to explain on a forum! I have spoken to a couple of colleagues they have referred me to Oxley v Hisock 2004 and that its says "the court has a wide discretion to assess their shares in the property", hence having a Trust Deed is less costly in the long run. Just to open another can of worms if the TR1 is tenents in common you should really have a will.......but that is another story!

[aimex]

Oxley and Hiscock is a different can of worms alltogether and the facts are completely different. In this case the woman and man were not married and the house was in the mans sole name. If a TR1 was drawn up and the OP and their other half were tenants in common and their shares were defined then the house would be in both of their names. In Oxley the court had to decide what shares the couple should each have.

So, sorry but still not seeing the open to challenge point. Imho TR1 is fine to define interests in land.

[ginandtonic1988]

I'm gonna have to come back to you on this one, as what a discussion in the office has this thread started!! All the fees earners have different points of view on TR1/Trust Deeds I am visiting the Land Registry in the next couple of weeks so think I will have a chat with them and see what there opinion is as well!!

[aimex]

ok. look forward to your response.