When you are buying a property with your partner, the last thing you want to think about is what will happen if you separate.
You may wish to consider making a declaration of trust. This is a document prepared to reflect the agreement between the owners of a property and record how each party should own their respective shares. A declaration of trust sets out, in a legally binding document, the contributions made by each party, and what should happen in the event of a relationship breakdown, or the sale of the property. Making a declaration of trust will reduce any uncertainty in the future, and hopefully avoid any potential disagreements which can be very costly and time consuming. It is also important to consider that a declaration of trust may be affected on divorce, as the Courts have a wide range of powers in relation to this.
You can make a declaration of trust at any time, although ideally this should be when the property is purchased. You can also make a declaration of trust when you move into a property owned by someone else. The document enables you to set out the contribution made by each party, whether this is a larger deposit from one party, increased mortgage repayments, a purchase with a friend or even help with the deposit from a third party who will not be named on the legal title. These are just a few of the scenarios in which it may be useful to consider making a declaration of trust.
The declaration of trust will be registered at the Land Registry and, when the property is sold, the proceeds of sale will be distributed in accordance with the terms agreed in the declaration of trust.