Deed of Trust

Deed of Trust Advice

When people buy a property with a spouse or a partner, circumstances sometimes mean that one contributes more than the other, or perhaps a family member contributes the lion-share of the deposit.

A deed of trust is a useful agreement that ensures a buyer’s interest are protected, and which helps to deal with the fallout should a relationship break down and the property is sold, or transferred into one person’s ownership.

What is a deed of trust?

A deed of trust is used when a buyer wants to hold the property as specific shares to ensure they will get their full money back when the property is sold or transferred (see Transfer of Equity). They ensure the person’s interests are protected and are fairly straight-forward to set up, but the consent of all parties is required.

A deed of trust is referred to by various other names. These include:

• Trust deed
• Declaration of trust and co-habitation
• Co-ownership agreement

Who needs a deed of trust?

Preparation of a deed of trust is advised for anybody who is purchasing a property with their partner, friend or relative as tenants-in-common. This is because they offer greater clarity to matters that can often be complex and information included in the deeds can include:

• Ownership of shares in a property
• The contribution made by the individuals to the purchase price
• Guidance relating to disputes over property development
• Guidance on what happens should one party pass away