Tenants In Common with 50/50 Split - Do we need a Declaration of Trust?

boboto

My partner and I are currently in the process of buying our first home. We're unmarried and have no children. When first instructing our solicitors they asked how we wanted to own it and we said as Tenants in Common as it seemed most common for unmarried couples. Also the fact that we could more easily change our wills if we decided we wanted someone than the other person to inherit their half later down the line, seemed possibly helpful.

We are splitting the deposit 50/50 and will be splitting all mortgage repayments 50/50 or any home improvements costs and will do for the foreseeable future. We will also be naming each other on our Wills to inherit the other person's share (as well as having life insurance to help pay remaining mortgage).

Our conveyancer has suggested we get a Deed of Trust (at an additional cost of £250). As far as we can tell though there doesn't seem to be a need for this - as I believe with everything split evenly, our desired situation would be the same as the legal 'default' of not having one stating specific details.

Is there any benefit to getting a Deed of Trust in our scenario? Is a Deed of Trust required to be considered Tenants in Common by the Land Registry?

da_rule

There are 3 boxes on the transfer deed in relation to joint ownership:
1) Property held on trust as joint tenants;
2) Property held on trust as tenants in common in equal share;
3) Property held on trust [and then a space where you could write it an uneven share percentage etc if needed].

As you say, option 2 of the transfer deed would seem to satisfy your needs. Also, as the name suggests, the transfer is a deed and so is as binding as a deed of trust. The only benefit of a separate deed of trust I can see is that you don’t have to register it at the Land Registry so could keep the exact details ‘secret’.

Maybe ask why your solicitors are advising a separate deed and why option 2 on the transfer deed won’t be sufficient. It may just be that they’re chancing their arm for a couple of hundred pounds extra in fees.

00ec25

the land registry form includes a declaration of trust section with an option to select equal shares. You do not need a separate £250 document doing the same thing

see the land registry guide on form TR1
https://www.gov.uk/government/publications/registered-titles-whole-transfer-tr1

ThePants999

A declaration of trust doesn't JUST (necessarily) document how you split the beneficial ownership - which, as has been said, can be done directly on the transfer deed if that's all you want to do. The declaration can and should cover other matters such as
- formalising your intentions to also each cover 50% of the mortgage. (You'll have joint liability for the mortgage, which means that if you didn't pay it, the mortgage company could come after either one of you for the full amount - if they came after you, you could take your partner to court for the 50% they owe, and this declaration would prove to the court that you'd agreed to pay 50% each.)
- the procedure to be followed should you split up. Breakups where property is involved can be particularly acrimonious, and can really screw over the person who moves out, as it's very difficult to force the other person to sell the house, or agree how to split the costs of selling - unless they've signed a document that shows what they agreed to in advance!

getmore4less

^^^^^^^
The important parts of DOT are to cover when things go wrong.

Tom99

[FONT=Verdana, sans-serif]To do just what you outlined, you don't need a DOT.[/FONT]

[FONT=Verdana, sans-serif]But you could consider ticking the 3[/FONT][FONT=Verdana, sans-serif]rd[/FONT][FONT=Verdana, sans-serif] box '[/FONT][FONT=Verdana, sans-serif]They are to hold the property on tru[/FONT][FONT=Verdana, sans-serif]st'[/FONT]
[FONT=Verdana, sans-serif]And then in the comments box below something like this:[/FONT]

[FONT=Verdana, sans-serif]'The parties hold the property in trust in accordance with Declaration of trust dated 14[/FONT][FONT=Verdana, sans-serif]th[/FONT][FONT=Verdana, sans-serif] December 2018 or such replacement at the parties later sign'[/FONT]

[FONT=Verdana, sans-serif]Or maybe it is sufficient to just say the parties with hold the property in accordance with a declaration of trust, your solicitor will know.
[/FONT]
[FONT=Verdana, sans-serif]You can then have prepared a very simple 50/50 DOT but one that can be updated at any time to accommodate changing circumstance, just for example:[/FONT]

• [FONT=Verdana, sans-serif]One of you loses their job and is unable to pay 50% mortgage so other party agrees to pay all at least for time being but long term want repaying etc[/FONT]
• [FONT=Verdana, sans-serif]You have a child and one of you gives up work or goes part time.[/FONT]
• [FONT=Verdana, sans-serif]One of you comes into an inheritance which you both agree could be used to pay back some of the mortgage[/FONT]

[FONT=Verdana, sans-serif]There are probably a score more examples where you might want to alter the DOT.[/FONT]

[FONT=Verdana, sans-serif]Now that the simple DOT exists you can revise it at anytime without referring back to the Land Reg, or even you solicitor if you felt confident in changing the DOT wording.[/FONT]

[FONT=Verdana, sans-serif]£250 from your solicitor is quite cheap, about 1hrs work, many will charge a min 2hrs so £500 or so. These people charge £150 plus a fixed £30 disbursements for a DOT, I have not used them myself but have seen other forum members make positive comments about them.[/FONT]

[FONT=Verdana, sans-serif]https://www.deedoftrust.co.uk/[/FONT]