Declaration of trust

aimex

Hey guys,

my friends are moving in together and want to be tenants in common due to unequal contributions. they are therefore entering into a dec of trust. however one party earns more than the other and to reflect this they wanted to have it so that their percentage share decreases over tme depending on mortgage payments etc. is this possible? sounds pretty complex to me!

xxx

whitewing

We just bought ours and I paid the hefty deposit, so ours is split so that first 15% after costs etc is mine and then rest is split 50-50. It'll all go into a joint acct anyway probably. Not planning on splitting up!

Debt_Free_Chick

aimex wrote: »

Hey guys,

my friends are moving in together and want to be tenants in common due to unequal contributions. they are therefore entering into a dec of trust. however one party earns more than the other and to reflect this they wanted to have it so that their percentage share decreases over tme depending on mortgage payments etc. is this possible? sounds pretty complex to me!

xxx

It's not what they earn - it's what they contribute towards the repayment of the mortgage.

As a simple example - both pay 50% of deposit and 50% of the mortgage repayments. Both own 50% of the value of the property.

One pays 20% the other pays 80%. One owns 20% the other owns 80%.

In order for the one with the smaller share to end up with more, they must contribute more to catch up - simply earning more is nothing to do with it.

Richard_Webster

If they simply pay the mortgage from a joint bank account into which all their money goes then their earnings will be relevant because that will be a measure of their respective contributions - but it could be very complicated to calculate exactly how much each has put in over a long period.

More sensible to each have separate bank accounts into which respective earnings are paid and then each to transfer an agreed amount each month (which could be equal or in agreed (more rounded) proportions) into a joint household account out of which mortgage payments electricity etc bills are paid. Easier then to calculate the proportions.

Debt_Free_Chick

Richard_Webster wrote: »

If they simply pay the mortgage from a joint bank account into which all their money goes then their earnings will be relevant because that will be a measure of their respective contributions - but it could be very complicated to calculate exactly how much each has put in over a long

Thanks Richard - fair point. It just never occurred to me they would do it that way! :eek:

Far easier to have a joint account for the house - mortgage and bills. Bills can be 50/50 with mortgage being in different proportions e.g. 20/80 - but the total going in must be sufficient to fund the total going out.