Buying a property is the biggest investment that most people ever make, so it makes sense to protect it. One way in which this can be achieved when buying a property as an unmarried couple is to enter into the ownership agreement as tenants in common and supported by a legally binding deed of trust.
Why Unmarried People Need a Deed of Trust
If a married couple divorces, their assets and finances will be divided fairly in accordance with the Matrimonial Causes Act 1973 as their legal relationship status is dissolved. Unmarried people who cohabit do not have this legal protection so must implement alternative measures to protect their investment.
What Does Tenants in Common Mean?
When two or more people buy a property together, they can choose to structure the ownership as joint tenants or tenants in common. Joint tenants own equal shares in the property, and should one person pass away, their shares transfer automatically to the other owner(s).
Tenants in common may have unequal shares in the property, make unequal contributions to the mortgage repayments and transfer their shares to a beneficiary of their choosing in their will.
What Is a Deed of Trust?
A deed of trust, when written by a solicitor, is a legally binding document that specifies the ownership structure of a property and defines how the proceeds of a future sale would be divided according to each individual’s proportional equity and any specific agreements that are made at the outset for funding mortgage repayments, property maintenance and any improvements.
A deed of trust is tailored to an individual’s unique circumstances and may detail any complex arrangements such as what happens to deposit contributions made by a third party that is not listed on the property’s title deeds in the event of a future sale and how increases in property value will be shared between the owners should either party wish to sell or transfer their share.
Who Writes a Deed of Trust?
Most conveyancing solicitors will write a deed of trust if instructed to by their clients during the conveyancing process. Alternatively, many online solicitors such as https://www.samconveyancing.co.uk/news/conveyancing/deed-of-trust-4378 offer a fixed fee service in which a legally binding deed of trust is written to the exact specifications of the client.
How Much Does a Deed of Trust Cost?
A deed of trust usually costs in the region of £300, but the protection it provides is invaluable. A deed of trust not only clarifies expectations and financial responsibilities but can minimise the risk of future misunderstandings and disputes, safeguarding relationships and enabling property purchases to proceed smoothly and expediently.
