When you are buying a property, a deed of trust can be essential for establishing clarity amongst the purchasers about the share they own. This brief guide will answer six of the most frequently asked questions to help clear up any doubt and confusion.
1. What does the deed of trust consist of?
This will vary depending on the circumstances; however, all deeds of trust are legally binding contracts, which means breaking them will result in legal issues for the participants.
2. Can a solicitor prepare a deed of trust?
Yes, solicitors can prepare a deed of trust. You can find solicitors who can prepare and provide more info on a deed of trust online.
3. How many parties can be included?
Whilst there is a four-person limit on property ownership, there is no limit on the number of parties involved in a deed of trust. You will just have more paperwork to complete for each party.
4. What is the difference between joint tenants and tenants in common?
These are the two ways to hold property jointly. Joint tenants are owners who don’t have shares; instead, they jointly own the property in its entirety. If one joint tenant dies, the other becomes the sole owner.
Tenants in common agreements are the opposite, dividing the property into shares. These shares do not have to be equal, and anyone who contributes to the cost can be included (such as parents who pay the deposit). You can read a more comprehensive explanation of the differences here:
5. How do you know whether you are joint tenants or tenants in common?
The title register, which you will have seen when you bought the property, will confirm your tenancy status. A paragraph will declare whether you are tenants in common or joint tenants, with the latter usually being true when there is no relevant paragraph present.
6. What is the process to terminate a joint tenancy?
You need to complete a fairly straightforward Form SEV and send it to HM Land Registry to sever your current tenancy agreement.
