Property Ownership

Question:

My friend and I own a Property together and we paid different amounts of money towards the Purchase.  I want to be sure that this is recorded and my contributions are protected.  What can I do?

Answer:

Debbie Bowey, Property Specialist replies:

Co-owning a property in fixed shares in the way that you do is referred to as owning the Property as “tenants in common”.

You are quite right to ask this question.  Whilst we may not like to think of such things, all joint purchasers should consider the issues that may arise later.  For example, what happens if there’s a disagreement or one owner wants to sell the property? Or, as in your case, one person has put in more money than another which can often be the case.

If these problems are not addressed they can lead to difficulties and even financial loss.

The good news is that there’s an easy way to deal with this, with a ‘Declaration of Trust’.  The purpose of the Declaration of Trust is to regulate the position between joint owners.

It is strongly advisable that when a property is held as jointly this is coupled with a ‘Declaration of Trust Deed’ which should include the following vital points:

1. To show the amount contributed by each party to the deposit
2. How big a stake each person has in the property
3. Conditions in respect of any future sale
4. Agreement as to how the mortgage should be paid in times of financial difficulty
5. How the property is to be used – i.e. habitation or rental
6. What will happen in the event of illness or death of one party

There may also be other details, particular to you and your friend which you wish to include in a Deed.

For more information on co-ownership please do not hesitate to contact Debbie Bowey on email dbowey@clarkeandson.co.uk or Tel: 01256 320 555.

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