Declaration of Trust: What it is and why it matters when buying property together

Declaration of Trust: What it is and why it matters when buying property together

Sophie Miller, Residential Property

Buying a property with a partner, friend or family member is a significant financial commitment. A Declaration of Trust helps ensure that everyone’s interests are clearly defined and protected from the outset.

What is a Declaration of Trust?
A Declaration of Trust (also known as a Deed of Trust) is a legally binding document that records how a property is owned between two or more people. It sets out each person’s financial contributions and explains what should happen if circumstances change in the future.

What does a Declaration of Trust do
A well-drafted Declaration of Trust can:

• Record how much each person contributed to the deposit and purchase price
• Specify how mortgage repayments will be shared
• Set out responsibility for ongoing costs such as repairs, improvements and insurance
• Explain how sale proceeds will be divided, after deducting any mortgage, fees and expenses
• Outline what happens if one owner wishes to sell, move out, or buy out another
• Include any other arrangements agreed between the parties

In short, it provides clarity and certainty by confirming each person’s financial interest in the property.

Why might you need one?
You may benefit from a Declaration of Trust if:

1. You are contributing unequal amounts
If one person is contributing more towards the deposit or purchase, a Declaration of Trust ensures that this is formally recognised.
2. You are buying with others
Whether with a partner, friend or family member, it helps avoid misunderstandings by clearly setting out each person’s share.
3. A family member is helping financially
If a parent or relative is contributing funds (either as a gift or loan), the document can record how this should be treated if the property is sold.
4. You are not married
Unmarried couples do not have the same legal protections as married couples. A Declaration of Trust provides clarity and reassurance about ownership.
5. You want certainty and peace of mind
Circumstances can change. Having a clear agreement in place reduces the risk of disputes in the future.

How we can help
We regularly advise clients on drafting tailored Declarations of Trust that reflect their individual circumstances. We can ensure your interests are clearly documented and, where appropriate, arrange for a restriction to be registered at the Land Registry to prevent the property from being dealt with without the consent of all owners.

Buying a property with others is an exciting step, but it’s important to get the legal arrangements right from the beginning. A Declaration of Trust provides clear, written protection for everyone involved.

At Hay & Kilner, we help clients put practical safeguards in place so they can move forward with confidence. Get in touch to find out how our expert team can help.