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    • Happy duck
    • By Happy duck 13th Oct 18, 10:35 PM
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    Happy duck
    Deed of trust answers needed
    • #1
    • 13th Oct 18, 10:35 PM
    Deed of trust answers needed 13th Oct 18 at 10:35 PM
    Hi, Iím buying a house with my partner & am putting all of the deposit down with the equity from the sale of my previous property. Iíve received a letter from my solicitor asking me how I want to split the shares in the house (tenants in common) but am at a loss how to work that out? Help & advice appreciated. I thought Iíd simply have it drawn up that I get my deposit money back if anything goes wrong in the future?
Page 1
    • da_rule
    • By da_rule 13th Oct 18, 11:06 PM
    • 2,874 Posts
    • 2,514 Thanks
    da_rule
    • #2
    • 13th Oct 18, 11:06 PM
    • #2
    • 13th Oct 18, 11:06 PM
    You have 2 options:

    1) You get the deposit amount back (i.e. if you are putting £10,000 in then you get the first £10,000 of the sale price then the rest is split evenly); or
    2) You get the % of sale price that is represented by your deposit. For example, if you are putting in a 10% deposit you will get the first 10% of the sale price. Therefore the equity split would be 55%/45% in your favour.

    These examples obviously assume that after clearing the mortgage there is enough equity in the property to pay you back your deposit amount.
    • Pixie5740
    • By Pixie5740 13th Oct 18, 11:16 PM
    • 13,389 Posts
    • 19,307 Thanks
    Pixie5740
    • #3
    • 13th Oct 18, 11:16 PM
    • #3
    • 13th Oct 18, 11:16 PM
    Hi, Iím buying a house with my partner & am putting all of the deposit down with the equity from the sale of my previous property. Iíve received a letter from my solicitor asking me how I want to split the shares in the house (tenants in common) but am at a loss how to work that out? Help & advice appreciated. I thought Iíd simply have it drawn up that I get my deposit money back if anything goes wrong in the future?
    Originally posted by Happy duck
    This has been discussed ad nauseam on the forum.
    • Pixie5740
    • By Pixie5740 13th Oct 18, 11:19 PM
    • 13,389 Posts
    • 19,307 Thanks
    Pixie5740
    • #4
    • 13th Oct 18, 11:19 PM
    • #4
    • 13th Oct 18, 11:19 PM
    Here is a starter for ten...

    https://forums.moneysavingexpert.com/showthread.php?t=5892237
    • Tom99
    • By Tom99 14th Oct 18, 4:20 AM
    • 3,131 Posts
    • 2,188 Thanks
    Tom99
    • #5
    • 14th Oct 18, 4:20 AM
    • #5
    • 14th Oct 18, 4:20 AM
    You have 2 options:

    1) You get the deposit amount back (i.e. if you are putting £10,000 in then you get the first £10,000 of the sale price then the rest is split evenly); or
    2) You get the % of sale price that is represented by your deposit. For example, if you are putting in a 10% deposit you will get the first 10% of the sale price and the remainder is split 50%/50%. Therefore the equity split would be 55%/45% in your favour
    Originally posted by da_rule

    The 55%/45% split will only happen when the mortgage is paid off.
    • getmore4less
    • By getmore4less 14th Oct 18, 6:20 AM
    • 33,658 Posts
    • 20,369 Thanks
    getmore4less
    • #6
    • 14th Oct 18, 6:20 AM
    • #6
    • 14th Oct 18, 6:20 AM
    Working out the split of a sale is the easy bit of a Deed, plenty of threads covering that part.

    it can also account for a mortgage not paid 50:50.
    Not spliting the mortgage 50:50 can be used to adjust the shares so you own 50:50.

    eg 25% deposit, split the 75% mortgage 25:50 and own 50:50.

    There is also a variation on the get your money back, you lend the OH 1/2 your deposit and they pay that back on a separate agreement(with or without interest) and if it is not fully paid back by the time the dale happens it comes from their share.

    The condition that make the sale happen need to be clear as well

    death, split, child...
    sale only, buyout, if buyout what is included or not, any adjustments for not having as much fees.

    Then there is upkeep(maintenance/enhancements)
    how should those be paid
    • Happy duck
    • By Happy duck 15th Oct 18, 10:31 PM
    • 4 Posts
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    Happy duck
    • #7
    • 15th Oct 18, 10:31 PM
    • #7
    • 15th Oct 18, 10:31 PM
    Thank you for the explanation. I want to do it the way you explain in your 1st option, so I will need to get revised paperwork that doesnít ask for the share split I think.
    • Tom99
    • By Tom99 16th Oct 18, 12:39 AM
    • 3,131 Posts
    • 2,188 Thanks
    Tom99
    • #8
    • 16th Oct 18, 12:39 AM
    • #8
    • 16th Oct 18, 12:39 AM
    Thank you for the explanation. I want to do it the way you explain in your 1st option, so I will need to get revised paperwork that doesnít ask for the share split I think.
    Originally posted by Happy duck
    Whichever way you go, a simple equity share split be it 60/40, 50/50, 90/10 or whatever will not work.
    You need the two part formula:

    1st Ė You get back your deposit, either as a fixed sum or more usually as a percentage of the sale price less costs of sale
    2nd Ė You split the remainder, after all sale costs and mortgage, in the same proportions you are paying the mortgage, usually 50%/50%

    It is only when the mortgage is paid off that you can then express your ownership in simple percentage terms.

    Usually you would have a separate Deed of Trust document setting out this agreement, together with any other terms you agree. That way if in a few years time you want to change the figures or percentages you can update the Deed of Trust without having to bother to update whatever is recorded at the Land Reg.
    • Happy duck
    • By Happy duck 17th Oct 18, 11:36 PM
    • 4 Posts
    • 0 Thanks
    Happy duck
    • #9
    • 17th Oct 18, 11:36 PM
    I get it now :)
    • #9
    • 17th Oct 18, 11:36 PM
    I get it now Tom99. I have asked for my money to be protected (no need for growth) & then a 50/50 split.
    Thank you for all your help everyone
    • getmore4less
    • By getmore4less 18th Oct 18, 1:41 AM
    • 33,658 Posts
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    getmore4less
    That's the equivalent of an interest free loan of 1/2 the deposit to the OH that gets paid back when the place is sold.
    • Happy duck
    • By Happy duck 20th Oct 18, 11:15 PM
    • 4 Posts
    • 0 Thanks
    Happy duck
    That's the equivalent of an interest free loan of 1/2 the deposit to the OH that gets paid back when the place is sold.
    Originally posted by getmore4less
    Iím happy with this. Thanks again
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