Deed of Trust - Interpretation

john1002

Hi,

I currently have a standard Deed Of trust on a property with my fiancee, I put an amount of money into the property we live in but I am not on the mortgage but do pay half towards to essentially keep my % currently at 47% and hers at 53%.

Am I right in my thinking that any working out on value due to me is based on property price currently recently valued at £325,000 less the remaining mortgage of £112,000.

So the % each is on £213,000 less obviously estate and solicitor fees.

I always thought that as I was not on the mortgage then my partner would need to use her % share to pay off her mortgage but believe my initial assumption is wrong and it is how i describe above.

can anyone confirm.

thanks

John

davidmcn

I think you'll need to tell us what the Deed of Trust says.

getmore4less

Many deed of trust don't do what people think

Exact wording needed.

Also the input conditions and how the payments have been done.

john1002

Ok I’ll get those together and post an update.

Thanks so far.

John

john1002

(A) On 13 May 2011 the Property was conveyed to the Owner to hold legally and beneficially absolutely.
(B) On the Owner resolved to remortgage the Property and accept various capital payments from the Beneficiary in so doing and consequently agreed to hold the Property from this date on trust for herself as Owner and the Beneficiary in the following manner.
(C) The Beneficiary paid £32,500 to the Owner as part of the remortgage of the Property referred to in paragraph B of the recitals (Beneficiary's Initial Contribution).
(D) The Owner paid £115,625.38 on 13 May 2011 towards the Costs of Purchase jointly with her ex-husband against a purchase price of £183,000. In December 2011 the Owner paid a sum of £50,000 to her ex husband to take a transfer of equity in the Property in order that the Owner owned the Property absolutely leaving a remaining balance of £65,625.38 having been paid towards the Costs of Purchase. The Property is now valued at £239,950 and the Beneficiary and Owner have therefore agreed that the Owner’s deemed initial contribution as at the date of this deed should be uplifted from £65,625.38 to reflect the increase in value of the Property since its acquisition in 2011 to £86,048.14 which amount is to be the agreed Owner’s initial contribution towards the Costs of Purchase (Owner's Initial Contribution).
(E) The Owner and Beneficiary may make Improvements to the Property.
(F) The Beneficiary and the Owner intend to contribute towards the Mortgage Payments equally.
(G) The Beneficiary and the Owner wish to declare the extent of their respective beneficial interests in the Property.
1. INTERPRETATION
The following definitions and rules of interpretation apply in this deed. 1.1 Definitions:
Costs of Purchase: the total of the amounts paid by the Owner in purchasing the Property.
2
Expenditure: sums paid by the Owners on or after the date of this deed in respect of any of the following:
(a) Mortgage Payments;
(b) any endowment policy taken out in connection with a mortgage secured on the Property;
(c) any Improvements; and
(d) incidental costs incurred in the sale of the Property (if applicable) relating to estate agent's fees, legal fees and disbursements.
Improvements: any work or improvements costing more than £100 made to the Property by agreement between the Owners.
Mortgage Payments: amounts due by way of mortgage interest or mortgage capital repayment and other amounts payable under or in connection with any mortgage secured on the Property.
Property: the freehold property at xxxx and registered at HM Land Registry under title number .
Total Expenditure: the total of the following amounts:
(a) the Beneficiary's Initial Contribution;
(b) the Owner's Initial Contribution; and
(c) the total of the sums specified in clause 3(b) and clause 4(b).
VAT: value added tax chargeable under the Value Added Tax Act 1994 (VATA 1994) and any similar replacement tax and any similar additional tax.
1.2 Clause, Schedule and paragraph headings shall not affect the interpretation of this deed.
1.3 The Schedule forms part of this deed and shall have effect as if set out in full in the body of this deed. Any reference to this deed includes the Schedule.
1.4 Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall include the singular.
1.5 Unless the context otherwise requires, a reference to one gender shall include a reference to the other genders.
1.6 A reference to any party shall include that party's personal representatives, successors and permitted assigns.
1.7 References to clauses and the Schedule are to the clauses and Schedule of this deed.
3

1.8 A reference to a statute or statutory provision is a reference to it as amended, extended or re-enacted from time to time.
1.9 A reference to a statute or statutory provision shall include all subordinate legislation made from time to time under that statute or statutory provision.
2. DECLARATION OF TRUST
The Owner declares that she holds the Property, its net proceeds of sale and its net rents and profits on trust for herself and the Beneficiary as tenants in common in the percentage shares specified in:
(a) Clause 3 for the Beneficiary; and
(b) Clause 4 for the Owner.
3. BENEFICIARY'S SHARE
The Beneficiary's percentage share shall be calculated by dividing the total of:
(a) the Beneficiary's Initial Contribution; and
(b) all sums paid by the Beneficiary in respect of the Expenditure,
by the Total Expenditure and then multiplying the result by 100.
4. OWNER'S SHARE
The Owner's percentage share shall be calculated by dividing the total of:
(a) the Owner's Initial Contribution; and
(b) all sums paid by the Owner in respect of the Expenditure,
by the Total Expenditure and then multiplying the result by 100.
5. VAT
When calculating the sums which form part of the Total Expenditure the Owners shall include any VAT incurred on those sums except to the extent that credit can be obtained for such VAT under the VATA 1994.
6. RECORD KEEPING
The Owners will keep records, statements and receipts relating to the Expenditure and their respective contributions to it.
4

7. REGISTRATION OR ENDORSEMENT
The Owner agrees to apply to HM Land Registry for the entry of a standard form B restriction against the title to the Property. This document has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it.


on top of the 32500 made reference too i have put a total of £78881 and the other party has put in £87957.90. Hope that helps but let me know if you need anything else, the above fits include mortgage payments made by us both.

john

john1002

Does it matter that the 87957.90 includes the 86048 plus her mortgage payments.

Also what figure is the 37.43% against is it the current property value 325000 or less the mortgage?

Hope that makes sense

John

Tom99

john1002 wrote: »

on top of the 32500 made reference too i have put a total of £78881 and the other party has put in £87957.90. Hope that helps but let me know if you need anything else, the above fits include mortgage payments made by us both.

[FONT=Verdana, sans-serif]Can you clarify what the 'Expenditure' is so far.[/FONT]
[FONT=Verdana, sans-serif]On top of the two initial contributions of £32,500 and £86,048.14 how much have you each paid?[/FONT]
[FONT=Verdana, sans-serif]Is your £78,881 additional to your £32,500? Is your partners £87,957.90 additional to the £86,048.14?[/FONT]

john1002

78881 includes the 32500 and partners is in total 87957.90

John

Tom99

john1002 wrote: »

78881 includes the 32500 and partners is in total 87957.90
John

[FONT=Verdana, sans-serif]Therefore:[/FONT]

[FONT=Verdana, sans-serif]Beneficiary: (£32,500+£46,381)/£166,838.90=47.28%[/FONT]
[FONT=Verdana, sans-serif]Owner: (£86,048.14+£1,909.76)/£166,838.90=52.72%[/FONT]

[FONT=Verdana, sans-serif]If the property is sold for £325,000 less say £5,000 EA & legal less £112,000 mortgage = '[/FONT][FONT=Verdana, sans-serif]Net Proceeds of Sale[/FONT][FONT=Verdana, sans-serif]'=£208,000.[/FONT]

[FONT=Verdana, sans-serif]Beneficiary: 47.28% = £98,342[/FONT]
[FONT=Verdana, sans-serif]Owner: 52.72% = £109,658[/FONT]

[FONT=Verdana, sans-serif]Why has you partner only paid £1,909.76 and you £46,381 towards mortgage and improvements?
[/FONT]

john1002

I paid deposit shortfall to this mortgage and all her debts to enable her to remortgage.

As well as significant improvements leading to increase in house value

John

Tom99

john1002 wrote: »

I paid deposit shortfall to this mortgage and all her debts to enable her to remortgage.As well as significant improvements leading to increase in house value. John

[FONT=Verdana, sans-serif]But how much have you both paid towards the mortgage (interest & capital) and improvements? That is what matters as far as the deed of trust is concerned..[/FONT]

[FONT=Verdana, sans-serif]Is your £46,381 all mortgage and improvements and is your partners £1,909.76 the total of what they paid towards mortgage and improvements?[/FONT]