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Trust Deeds

It is crucial that when a property is owned by 2 or more individuals that a decision is be made as to how the property is to be held; therefore property may be held as either ‘Joint Tenants’ or ‘Tenants in Common’.

Joint Tenants

This means that each co-owner has an interest in the whole of the property. In the event of a sale of the property, any sale proceeds would (unless a Court directs otherwise) be divided equally between the co-owners regardless of any monies paid individually in the original purchase of the property and of any mortgage payments or expenditure incurred in general upkeep.

Please note that a co-owner cannot leave his or her interest in the property to anyone else by way of Will or otherwise. In the event of a death of one co-owner, the surviving co-owner would automatically own the property solely and can deal with the property in whatever way he or she chooses regardless of the interests, responsibilities or contributions of the deceased co-owner.

Tenants in Common

This means that the respective interests of co-owners in the property are defined by way of a percentage share. For example an equal share 50/50 or unequal share of 75/25. In the event of a sale of the property, any sale proceeds would then be paid to each co-owner in accordance with their shareholding set out in the Transfer Deed, or otherwise set out in a Trust Deed (see below).

In the event of the death of a co-owner, that co-owner’s interest in the property will pass in accordance with any Will that may exist for that person or otherwise in accordance with the rules of intestacy. The surviving co-owner does not own the property solely and each co-owner may therefore protect their other interests, responsibilities or contributions to the purchase and running of the property by this means.

Trust Deed (Important)

Co-owners holding the property as Tenants in Common should enter into a Deed of Trust together. This Deed sets out the terms of the trust and specifically states the amount that each co-owner has contributed towards the purchase of the property and will take into account any mortgage loan and any other issues that the co-owners agree will affect their holding.

This Deed will also control how the balance of any sale proceeds following payment of any mortgage debt is to be divided between the co-owners following a future sale of the property. Such a Trust Deed will enable both co-owners to protect their respective interests in the monies invested in the property in the event of any future dispute between them.

Basic Trust Deeds start from £95+VAT.

Feel free to contact our offices on 0845 458 6291 or email us at info@averyknights.com; whatever the nature of your query we will be more than happy to assist.