A deed of trust, also called a declaration of trust, outlines the distribution and ownership of a jointly-held property and is a legal document offering protection to all parties. It specifies everyone’s share and financial contribution to provide protection and clarity in the event the partnership dissolves or the property is sold.
Reasons to have a deed of trust
A deed of trust, which can be created with the help of companies such as https://www.parachutelaw.co.uk/deed-of-trust, offers financial protection in the case of joint ownership. It ensures fairness when different parties contribute differing amounts and safeguards the financial investments of all parties.
A deed of trust will outline the beneficial interest split of a property, covering everything from renovation costs to mortgage payments. It helps ensure the share of a property accurately reflects the contributions made. Parties agree from the outset on how a property will be split, which can be extremely important in the case of relationship changes or when a property is sold. You can read more about deeds of trust on the government website:
Deeds of trust and mortgage lenders
A deed of trust is a legal record that reassures lenders when it comes to mortgage repayments and can be vital in securing a mortgage. Most lenders will insist that one is in place when it comes to joint property purchases involving two or more parties.
Deeds of trust are appreciated by mortgage lenders, as they give clarity about the financial responsibilities and contributions of all owners. It ensures everyone is aware of how the mortgage payments are being split and offers lenders the clarity required about shared ownership, especially in the case of joint mortgages.
Deeds of trust and relationships
Joint owners and unmarried couples should have a deed of trust to provide invaluable clarity when a relationship is not subject to the legal recognition of a civil partnership or marriage. It acts in a similar way to a prenuptial agreement by detailing rights and contributions and offering a practical solution to ensuring financial security.