Buying A House Together - Deed of Trust?

Tokmon

gettingtheresometime said:

Endstation said:

I would 100% avoid a deed of trust, me and my girlfriend at the time (married now) got one when we moved into our house and it's been nothing but a pain when we tried to remortgage. So we went to a solicitor to get it removed, had letters of agreement from all parties (as some parents money was involved) which all required separate blood sucking solicitors to the cost of £1000+ in total - since they all phone each other and charge a silly amount per minute.

Only for the @Land_Registry to decide on their own that it wasn't in the best interest for my Fiancé at that point to have it removed. Never got the money back and still stuck with this deed of trust. Solicitor seemed surprised the LR could do that, I still have no idea to this day but he seemed useless also. 

Will have to go through it all again at next remortgage and hopefully now we're married it will be enough. Absolute joke you can spend all that money, get agreement from all parties and then someone in the local LR office decides no. Probably someone I had an arguement in school with for all I know since no reason or anything was never passed along to us other than the above.

I don't know much about these things but I always thought a DOT was basically a document that set out how equity would be divided in the event of a split so I'm a little confused (and curious) as to why the LR would even get involved? 
I'm also curious as to why DOTs tend to state that the nominal amount would be returned to each party before the remaining equity is split - wouldn't it be better to return whatever percentage of equity that the amount has bought.

  I agree this is the fairest way to do it and that's exactly what i have on a property myself and my partner are buying where we each get a percentage of the property sale based on the amount of deposit we put in and split the rest after that 50/50.

getmore4less said:

Natbag said:

Ours was meant to be very straight forward - we both get back the exact deposit amount we put in as a fixed amount in £, and then any equity left would be split 50/50 after all fees are paid. We'll both be paying half of the mortgage and bills, and this seems the fairest way of protecting our individual wealth now and our shared interest in the property we are buying. We aren't receiving any gifts of money, it's just our own capital. It does seem odd that the LR would be involved in a remortgage, but I don't really know the process.

With the get your deposits back a simple loan document for 1/2 the difference does the same job as that is what it is a loan by the big deposit to the small deposit to even things up.

No need to deal with the Land reg for  DOT or loan agreements,  as has been found is counter productive.
(BIg loans may be better with a charge)

For a property with a mortgage there really should be no 3rd party on the DOT dealing with the purchase.

Doing it as a loan or a fixed amount would make it unfair if the house price increases or decreases and is only fair if the house price is exactly the same when sold which is very unlikely.

Natbag

Land_Registry said:

HMLR ‘only get involved’ on two levels. The first will always happen on a remortgage as a lender will secure the loan against the registered title. 

The second is IF you decide to apply for a restriction to protect the DoT you have entered into. You don’t have to but if you do then you usually apply for what is known as a form A restriction. This can be applied for when your beneficial ownerships have been split in this way, namely through your DoT. 

A form A restriction only restricts a sole registered owner so won’t impact in future if you are both involved in say a sale or remortgage.
endstation’s scenario reads as if they went further and had more than just a form A restriction in play - quite likely if others had an interest. I’m surprised we had any say in what the fiancee’s best interests were but OP doesn’t appear to have that same level of involvement as just two of them and a DoT/2way split. 

Thank you. So the DoT shouldn't be an issue or a complication if it's just a case of us remortgaging at the end of our fixed term to get a better rate, if nothing has changed and we are still applying together, is that correct?

Land_Registry

Natbag said:

Land_Registry said:

HMLR ‘only get involved’ on two levels. The first will always happen on a remortgage as a lender will secure the loan against the registered title. 

The second is IF you decide to apply for a restriction to protect the DoT you have entered into. You don’t have to but if you do then you usually apply for what is known as a form A restriction. This can be applied for when your beneficial ownerships have been split in this way, namely through your DoT. 

A form A restriction only restricts a sole registered owner so won’t impact in future if you are both involved in say a sale or remortgage.
endstation’s scenario reads as if they went further and had more than just a form A restriction in play - quite likely if others had an interest. I’m surprised we had any say in what the fiancee’s best interests were but OP doesn’t appear to have that same level of involvement as just two of them and a DoT/2way split. 

Thank you. So the DoT shouldn't be an issue or a complication if it's just a case of us remortgaging at the end of our fixed term to get a better rate, if nothing has changed and we are still applying together, is that correct?

We don’t register a DoT unless you apply to register it in some way eg form A restriction. So if you do a DoT you need to understand what it’s legal impact is and you’d have to ask a lender whether it’s something they consider as part of a remortgage. 

If you choose to register a form A restriction I’m not aware that would be an issue for a lender provided both of you are remortgaging 

Endstation

To the above comments, yes ours was slightly different as I had to get the mortgage on my own. There was a fairly small amount of money but enough to count from parents also for our deposit, as well as some from my now Wife so we were advised to get a DoT to have it all set out, which added a title to our deed or something like that hence the LR involvement. Which I don't disagree with in principle. Really my message to OP is just make sure you ask enough questions and know where you stand with it all, including if it will be an issue remortgaging and or if you need to remove it in the future. Best of luck!

What really messed things up with us was when trying to remortgage for a better deal, I understand everything to be fair the real problem I had is the LR (supposedly) taking issue and going against what we had paid multiple solicitors to sort out. Now we are married and therefore our assets are more legally binding my mortgage advisor thinks it shouldn't be as much of an issue next time. But I guess I can only wait and see, not exactly excited about the prospect of trying to get this dealt with (and no doubt paying another large sum of money to do)

Natbag

Thank you both, I'll make sure to ask about this and make sure we know the implications before we agree to get the DoT.