What is a Residential Declaration of Trust? - YouTube

Hi I'm Charlotte and I work in the real estate team along with my colleague

Victoria, we will be discussing declarations of trust. When you own a property you're

considered legally as the registered proprietor; there are three ways that you

can hold a property: the first way you can hold a property is as joint tenants,

the second way is as tenants in common in equal shares,

and finally tenants in common in unequal shares.

Starting with joint tenants as you mentioned is the one way you could hold

a property, so if you and another purchaser entered into the purchase of a

property you could hold as joint tenants whereby you would equally own all shares

in the property, and the difference with this and tenants in

common and equal shares is that on the death of one of the proprietors the

shares in the property would automatically transfer to the surviving

proprietor or proprietors. So tenants in common is different,

starting with tenants in common in equal shares you would hold your own share of

the property but that would remain separate from the other parties interest,

so evidence of this would be on the title register at the land registry

where a restriction would be placed on the title as evidence that it's held

as tenants in common. The difference as mentioned earlier with joint tenants is

that then on the death of one of the proprietors the existing share of the

deceased in the property would not automatically transfer to the other

proprietor it would go in to the deceased estate so it would then be

dealt with in accordance with their will, if there was no will present it would be

dealt with by intestacy rules. So now moving to tenants in common in unequal

shares, the principles remain the same as just described with tenants in

common however as the name would suggest the shares in which would be

unequal and this is where our declaration of trust would come into play.

So where does the declaration of trust fit in? Well starting with a brief

definition, a declaration of trust is a document that would be drawn up at the time

of purchase to express the interests of each party at the time of

purchase. So if circumstances of party changed would you recommend further

legal advice was sought? Most certainly yes, so at the initial point of purchase

and at any time in the future so perhaps if one of the proprietors was intending

to remarry then a declaration of trust should be entered into to protect the other

proprietors interest in the property. So why is the declaration of trust important?

Well it's become a lot more common in recent years due to changes in society,

examples of a few reasons why a declaration of trust would be important

is perhaps in the instance that a young new couple decided to purchase the

property together, we as solicitors would always advise that whilst we hope nothing would

happen a declaration of trust should be entered into perhaps in the instance that one of

the proprietors put in more money towards the deposit that could be put

into the agreement, or perhaps where there's a mortgage on the property and

they have an agreement in the sense that one of the proprietors would pay the

mortgage and the other would pay the bills -

declarations of trust can be as complex or a simple as circumstances require.

Moving on to another example would be later in life, perhaps a second marriage,

again becoming a lot more common in recent years but parties that are

entering into a purchase are remarried, this is where a declaration of trust

would come into play if perhaps they both had children from previous

marriages and again in the unfortunate event of death of one of the proprietors

they could ensure that it didn't revert all to the existing proprietor and that

children from a previous marriage would not be disinherited perhaps. As part of

the real estate team we work closely with our clients, it's vital that

declarations of trust are drafted clearly and correctly to ensure

protections of our clients assets and avoid complications in the future.