What is a Deed of Trust?
A Deed of Trust or Declaration of Trust is usually set up by those who own a house as tenants in common. This legally binding document confirms how much each person has contributed toward buying the property. Usually, a Deed of Trust is suitable when both people have paid different amounts toward the deposit, for instance in situations where an unmarried couple, friends or family members have bought a house together.
When you sell your house, the Deed of Trust will confirm the share that each party is entitled to. If one person has paid more towards the deposit, they will get back their percentage in the sale and then any profits will be split equally after this.
What is the difference between joint tenants and tenants in common?
If you buy a house as joint tenants it means that if one of you dies, the other person will inherit the property. This is typically how married couples buy a home. On the other hand, you can buy a property as tenants in common which means that you own different shares in the property and your share does not automatically go to the other person if you die. If you make a Will, this will confirm who will inherit from you.
Why do you need a Deed of Trust?
A Deed of Trust is a good idea if you own different shares in a property, for instance, one person owns 60% and the other owns 40%. This is because it is good to keep track of what amount has been contributed to the property in case one person wants to buy out the other in the future, or if the property is sold. In that case, each person’s share in the property is protected and they will receive back what they put forward. It also avoids any disputes about what shares each person owns as it has been recorded in a legally binding document.
Do you need a solicitor to draw up a Deed of Trust?
It is best to ask a solicitor to draw up a Deed of Trust to ensure that it is legally binding. Since the Trust is in place to protect your investment in a property, you want to be certain that it has been drafted correctly and that your share is sufficiently protected and secure in case of any disputes.
How Can GloverPriest Help?
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