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How to make a Declaration of trust

For use in England and Wales only.

If two or more people are purchasing a property together they may want to purchase as tenants in common. This declaration of trust for tenants in common records each person's contribution and therefore the proportions of the property they own. A deed of trust can also record contributions to mortgage payments and maintenance. Creating this declaration of trust when purchasing is important when the property is sold as it ensures that each homeowner gets a fair portion of what they put into the property. If additional people, other than the homeowners, have contributed to the purchase price you can look at our Declaration of trust with beneficial interest.

Use this declaration of trust:

  • if you are buying a property as tenants in common with one or more people and all parties wish to confirm how their contributions to the following are to be made:
    • purchase price
    • mortgage payments, and
    • maintenance of the property

This declaration of trust enables homeowners:

  • to have a legal document that confirms the actual proportions in which owners own their homes
  • to confirm the actual amounts originally spent by each party in terms of a percentage amount
  • to confirm the proportions to be repaid to each homeowner when the property is sold
  • to specify the parties' contributions for the payment of the mortgage and maintenance obligations
  • to prevent arguments as to who gave what at the beginning and who should get what when a property comes to be sold

The declaration of trust is a purely personal agreement and the obligations you have to your lender mortgage company will always remain joint and several, whatever you state in this deed. It will always remain a fact that if one of you fails to pay the mortgage, the other is/others are wholly responsible.

A declaration of trust is a document that confirms the proportions in which two or more individuals own a property. It contains an express declaration that the co-owners hold the property on trust for themselves as tenants in common. Unlike joint tenancy, tenants in common can specify their distinct share in the property. This document sets out the respective beneficial interest of each tenant in common based on their contributions to the deposit, mortgage and ongoing maintenance.

For more information, read Declaration of trust.

You need a declaration of trust when you are buying property as tenants in common with one or more people and you want to carve out distinct shares. Upon the sale of the property, you will receive back the same percentage of the proceeds as you put in of the distinct share. It is also possible to leave your distinct share to someone in your will, which is not possible to do if you are joint tenants.

Any number of parties can enter into a declaration of trust.

Once the declaration of trust is complete, it should be registered at the Land Registry, but this is not necessary. It is recommended to show evidence of the true ownership of the property. You can do that by completing the declaration of trust panel in Form TR1 (during a house purchase) or Form JO (to be used in the absence of a transfer, asset or lease) and sending it to the Land Registry.

Work out very carefully the proportions in which you and the other trustees will own the property and remember to include the costs of the purchase in your calculations because they will reflect the proportions that will be used to distribute the sale proceeds when the property is sold.

You can terminate this agreement by giving four months' written notice to each of the other owners.

Ask a lawyer:

  • if you are joint tenants (which means when you die, your co-owner(s) automatically inherit your property and you cannot leave it by your will). It is possible to sever the tenancy and then complete a declaration of trust. If you are doing this and your shares are not equal, you will need advice from a lawyer
  • for further advice if you are buying a house unequally and you have children between you

This declaration of trust is governed by the law of England and Wales.

Other names for Declaration of trust

Deed of trust, Tenants in common agreement, Co-ownership agreement.