Most disputes regarding property ownership happen between unmarried couples or co-owners in a more general context. Here’s how thinking ahead now can prevent such (often costly) disputes:
Do you want to set out equal or fixed shares at the outset?
Make an express declaration of trust when completing and signing your Land Registry papers
A declaration of trust sets out who is entitled to what fixed share and in the event of a legal dispute is generally treated by the Court as conclusive evidence of the co-owner’s intentions.
If you fail to make an express declaration of trust, the general presumption in law as adopted by the Land Registry, is that the property is held as joint tenants in equal shares. It is therefore quite challenging to overturn this presumption further down the line (i.e. if the co-owners separate or a co-owner dies), if it turns out the shares were not intended to be equal, as the Courts will usually only overturn this presumption in exceptional cases, where there is overwhelming evidence to the contrary.
Do you want to hold the property as tenants in common and ensure both current and future contributions are reflected in your respective shares?
Prepare a bespoke Declaration of Trust
This type of declaration of trust will be tailored to your own criteria. Usually, it will ensure that the following factors are considered when calculating your future shares:
- Cash contributions to the purchase price;
- Ongoing mortgage contributions;
- Any money each party spends on future improvements to the property
What steps should we take?
1.Decide how you wish to hold the beneficial interest in the property, taking the above information into account.
Please feel free to contact us if you need further guidance before making your choice.
2. Remember you can review your decision at a later stage if circumstances change. For example, you may decide to hold the beneficial interest as joint tenants now but later decide holding it as tenants-in-common is more appropriate.
Either party is able to “sever” a joint tenancy and turn it into a tenancy-in-common after you buy the property, even without the other party’s agreement.
3. Review your existing Will or make a new one to ensure your share of the property goes to the right people after you have passed away.
If you would like to make an appointment with Solomons Solicitors, please contact us on 01202 802 807.