Joint Ownership
of Property
There are two different ways in which property can be
owned jointly – either ‘beneficial joint tenants’ or ‘tenants in
common’. Both these methods of ownership mean that the property is owned
jointly by two or more people but the way this is viewed by the law is quite different. Click
here for more information
If the way in which you choose to own your
property is tenants in common then you should have a trust deed (sometimes
called a declaration of trust) which records the arrangement between the joint
owners. There are a few fairly common ways of setting out in a trust deed what
is to happen to the sale proceeds when the house is sold -
-
One way is to
state that each party has a percentage
share each i.e. you might say that one person has a 30% share and the
other has a 70% share and that if the property was sold then the money
would be divided in that way.
-
Alternatively you may say that one party is entitled
to a fixed sum out of the sale proceeds with all the balance being payable
to the other owner – in this way one person has the benefit of all the
potential increase in value (and also bears the risk of the potential
reduction in value) whilst the other persons share is fixed irrespective
of the property value.
-
Thirdly you could have a combination of the first two
You also need to consider whether there is a mortgage on the property. If there is then the
trust deed should provide for this to be paid off before dividing the sale
proceeds, or if one party is to be responsible for all or part of the mortgage
capital payment out of their share then this should be stated. Further the trust deed should go on to define the proportions in
with the joint owners would make the mortgage payments.
As
a further option you may wish to consider whether the document should contain
a right of first refusal in the event of one party wishing to dispose of their
share in the property.
This is called a right of pre-emption. The arrangement would be that if one
party wished to sell the property they would first give notice of this
intention to the other parties who would have the right to buy that persons
share at market value.
Choose the document
from the list below
which most closely fits your circumstances
and click the button next to it to begin the download.
If you would like some guidance in choosing which suits you best then try our Trust Deed Selector
The
document will download as a Zip file. Once downloaded it will unzip to a Word document. A shareware version of
WinZip is freely available from many places. If you wish you can download it
by clicking the WinZip button at the side of this page
Our trust deed templates assume that the
arrangement is between two people - but with a little adaptation can be made
to suit a situation involving more than two parties - if you would like
assistance with a more bespoke template then please email us with your
requirements and we will let you have a price for a once off template.If
you are interested in a trust deed relating to a property held in the sole
name of one party then click
here
You should also consider whether the transaction constitutes a disposal of an
interest in land for Stamp Duty Land Tax purposes. If the trust deed is simply
recording the existing position then then it would not constitute a
disposition. If though you are using it as a device to transfer a share in
ownership then it would. Click here
for more information.
Trust deeds are
designed to regulate the position over the amount and distribution of
the equity in the property. If you want to go further and have an agreement that deals with the
regulation of the day to day relations between cohabitees then you need to
have a cohabitation agreement - click
here for more
information
The
documents downloaded from this web site will be in the form of a Zip file. Once downloaded it will unzip to a Word
document. You will need a zip utility to unzip the document - Windows XP
contains a built in utility. Alternatively shareware versions suitable for
unzipping a file can be obtained from the Internet - for example, click the Winzip
button at the side of this page.
The
documents available on this site have been prepared for use in England &
Wales. They may not be valid if used in other areas.
