Legal Q&A: what is a declaration of trust and why should my friend and I get one if we are tenants in common?
Question: Me and my friend own a flat together — I think as tenants in common. We both live in the property. I read recently that when you buy a property with a friend or a sibling you should have a declaration of trust. Why is that? I do not remember our conveyancer mentioning that to us.
Answer: In general, co-owners who are not married and are not civil partners hold property as tenants in common, so it is likely that you do hold your property in this way.
Where a tenancy in common exists, it is prudent to have a declaration of trust setting out the shares each party owns in the property.
You may have invested equally — for example, by both contributing the same amount towards the deposit — and it may be your intention that you both have an equal share in the property.
Alternatively, you may have invested unequal amounts and intend to own unequal shares in the property.
Whatever your situation, a declaration of trust can confirm not only your shares in the flat, but can also confirm agreements you have reached regarding such matters as responsibility for outgoings and maintenance costs, what is to happen if one of you wishes to sell their share in the property, and so on.
Though it would be preferable to have had a declaration of trust in place on the completion of your purchase, it is certainly not too late to enter into one now.
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.
If you have a question for Fiona McNulty, please email legalsolutions@standard.co.uk or write to Legal Solutions, Homes & Property, London Evening Standard, 2 Derry Street, W8 5EE.
We regret that questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.