Purchasing property with another person, whether a partner, friend, or family member, is an exciting milestone. But amidst the excitement, it’s essential to protect your financial interests and clarify ownership arrangements. That’s where a Declaration of Trust (DoT) comes in.
What Is a Declaration of Trust?
A Declaration of Trust is a legal document that outlines how a property is owned between two or more parties. It records each person’s financial contribution and sets out what should happen if the property is sold, one party wants to move out, or circumstances change.
It’s especially important when:
- Owners contribute unequal deposits
- One party is paying more towards the mortgage
- A third party (e.g. a parent) is contributing financially
- The owners are not married or in a civil partnership
Why Is It So Important?
Without a Declaration of Trust, disputes can arise over who owns what share of the property—especially if the relationship breaks down or one party wants to sell. Here’s why it’s crucial:
- Protects Your Investment
If you’ve contributed more to the deposit or mortgage, a DoT ensures your share is protected and clearly documented.
- Avoids Future Disputes
It provides clarity and transparency, reducing the risk of disagreements later on.
- Supports Estate Planning
A DoT can be aligned with your Will, ensuring your share of the property passes according to your wishes.
- Clarifies Responsibilities
It can outline who is responsible for bills, maintenance, and other costs associated with the property.
Common Scenarios Where a DoT Is Recommended
- Unmarried couples buying a home together
- Parents helping children onto the property ladder
- Friends or siblings investing in property jointly
- Buy-to-let investors pooling resources
What Can Be Included in a Declaration of Trust?
- Percentage ownership of the property
- Contributions to deposit, mortgage, and other costs
- What happens if one party wants to sell
- How proceeds will be divided on sale
- Provisions for rental income (if applicable)
How We Can Help
At McHale & Co Solicitors, we specialise in drafting clear, tailored Declarations of Trust that reflect your unique circumstances. We’ll guide you through the process, ensuring your interests are protected and your property arrangements are legally sound.
Thinking of buying property with someone else?
Contact us today on 0161 928 3848 to discuss how a Declaration of Trust can give you peace of mind and protect your investment.
