If you are considering co-owning a property, there are various options available to you to protect your interest.

Usually, people will chose to be registered as co-owners, and their interest will be either as a joint tenant or as a tenant in common. (For further information about these, please see our guide “Joint Ownership of Property”).

However, it is possible to have an interest in a property and not be formally registered as an owner. This may be particularly pertinent to you if you are making a financial contribution to the purchase of the property, but cannot, or do not wish to be noted on the title deeds.

TRUST ARRANGEMENTS
Under English law, if you have an agreement with a person – whether formal or otherwise – whereby in return for a contribution on your part you will have an interest in the property, then the “legal owner” will be treated as holding the property, or part of it, on trust for you.

This however can be difficult to prove, and in the event that you do wish to contribute towards a property in return for an interest in it, it is advised to have a formal declaration of trust drawn up.

Broadly speaking, a Declaration of Trust is a document whereby the legal owner declares that while s/he is the legal owner of the property, you are a beneficial owner.

This Declaration of Trust will set out the extent of your interest in the property – whether it’s a percentage share, a share equal to the legal owners, or just a share equal to the value of your contribution.

If you hold an interest under a declaration of trust, your interest has a monetary value, and can be passed on to other persons under your will or in accordance with the law.

CO-OWNERSHIP PROVISIONS
The term “co-ownership agreement” is often used to describe the above declarations of trust. However, this is not strictly accurate.

The Declarations of Trust are the documents which record a person’s beneficial interest in a property. Often the parties will wish to add specific provisions to these documents setting out their joint or respective obligations or their agreements in relation to the property – for example those the steps which must be taken in the event that one or other of the parties wishes to sell the property or move out etc.

These are contractual provisions between the parties; for ease of reference, they are usually included in the Declaration of Trust, creating a complete document relating to the co-ownership arrangements of the property.

The exact nature of these additional provisions depends on your specific circumstances. All co-ownership agreements prepared by Clegg Manuel are created with your particular requirements in mind, having discussed in depth all of the preferred and most appropriate options with you.

For additional protection, the existence of these documents can be noted on the title documents, and registered at the Land Registry.

ENQUIRIES
If you have any enquiries about how best to protect your interest in a property, please contact us by ‘phone or through our website and we’ll be happy to discuss your requirements with you.

© Clegg Manuel 2008

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