If you’re buying a property with someone else, you may be asked to sign a Declaration of Trust. This is a legal document that sets out how the gifted deposit (if there is one) will be repaid, and how any profits or losses from the sale of the property will be shared.

It’s important to understand what you’re signing before you put your name to it, so we’ve put together this guide to help explain what a Declaration of Trust is, and what it means for you.

What is a Declaration of Trust?

A Declaration of Trust (or DOT) is a legal document that sets out the ownership rights of each person in a property transaction. It can also be used to determine how any gifted deposit or loan repayments will be made, and how any profits or losses from the sale of the property will be shared.

Why do I need to sign one?

If you’re buying a property with someone else (known as a joint purchase), then you’ll both need to sign a Declaration of Trust. This is because the ownership rights of each person in the property transaction need to be legally defined.

If there is a gifted deposit involved in the purchase, then the Declaration of Trust will also state how this gifted money will be repaid. And if the property is sold at a later date, the Declaration of Trust will determine how any profits or losses will be divided between the joint owners.

What should I include in my Declaration of Trust?

Your Declaration of Trust should include the following information:

– The names and addresses of all the joint owners involved in the property transaction.

– The property address that is being purchased.

– The amount of money each person has contributed towards the purchase price (including any gifted deposits).

– How any profits or losses from the sale of the property will be divided between the joint owners.

– What will happen if one of the joint owners wants to sell their share in the property.

– What will happen if one of the joint owners dies.

Signing a Declaration of Trust is a legal way of ensuring that everyone’s rights and responsibilities in a joint property purchase are clearly defined. It can help to avoid any disputes between joint owners further down the line.

We offer a free initial virtual or in-person consultation to discuss your specific circumstances. If you would like to make an appointment with one of our experts, please contact us today.