Declaration of Trust Post Completion

Adam1300 · 23 April 2018 at 5:34PM

I loaned my son a sum of money as a deposit to get his foot on the housing ladder. When negotiating the mortgage he stated that the money was a ‘gift’, as the suggestion of it being a loan would have complicated things and cost him more money. We had agreed that we would set up a declaration of trust after completion. Having emailed his solicitor to request the declaration, she advised that the lender would need to be informed and may not agree! Basically if/when he sells the property I would like my 10% share back. Not a problem as he is a good lad, but the usual worries of something happening to him, or suffering an acrimonious split from a girlfriend, mean that I would like it formalised.
Any advice? Would the lender actually refuse?
Thanks in advance.

Thrugelmir · 23 April 2018 at 5:36PM

Did you sign a letter declaring the money to be gifted?

Jaywood89 · 23 April 2018 at 5:56PM

Im sure someone else will say it soon, never gift a deposit if you expect it back or a share in the property.

The solicitor is right, a lender won’t like it, they have signed an agreement with your son not with you and your son

The girlfriend thing, a girlfriend can’t just take his property, a wife however can stake claim to part of it.
You have already said it was a loan so was there a formal agreement of how he will pay it back and was this made clear to the lender?

anselld · 23 April 2018 at 6:13PM

Adam1300 wrote: »

Any advice? Would the lender actually refuse?

Not only will they refuse, they will probably conclude that your son has committed mortgage fraud by declaring a loan as a gift.

Probably best to leave things as a "gentleman's agreement".

Adam1300 · 23 April 2018 at 8:02PM

Hmmm. That!!!8217;s all perfectly clear. My fault. I did want him to do it all properly at the outset but I allowed myself to be softened by his pleas to keep it simple in order to obtain the basic mortgage. We have signed nothing, only our gentleman’s agreement between us. I trust him entirely I just wanted to protect myself against unforeseen future difficulties. It will have to stay that way, and I understand that any changes would obviously raise questions about the initial mortgage declarations etc. Thanks for the help one and all.

Adam1300 · 23 April 2018 at 8:08PM

Currently he has a girlfriend that pretty much lives with him full time. Will they marry? Will they divorce? Who knows.

Jaywood89 · 23 April 2018 at 9:15PM

I’m all honestly, I think you either need to draw up a written agreement that he borrowed x amount for x amount of time and will pay you back x amount per month.

If he breaks it you can persue legal roots should you wish.

And your right you don’t know what the future hold for him but that’s the risk. Hope it all works out for you though

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Declaration of Trust Post Completion

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