Buying a property with someone else, whether a partner, a friend, or with help from family, often means people put in different amounts of money. A deed of trust is the document that records who contributed what, and what each person is entitled to if the property is ever sold. Here’s what a deed of trust is, what it’s used for, and how to go about getting one.
What is a deed of trust?
A deed of trust, also called a declaration of trust or a property trust deed, is a legally binding document that records each owner’s financial interest in a property. It sets out how much each person contributed and how the proceeds should be divided when the property is sold.
When you buy with someone else, you hold the property in one of two ways. Joint tenants own the whole property together as a single unit, with equal shares, and if one owner dies their share passes automatically to the other. Tenants in common each own a defined share, which can be equal or unequal, with no automatic passing on, so each person’s share goes to whoever they choose in their will.
A deed of trust is most useful for tenants in common, because it’s the document that records exactly what those shares are.
Why do I need a deed of trust?
Without a deed of trust, the law may treat co-owners as owning the property in equal shares, regardless of what each person contributed. If contributions were unequal, that can lead to an unfair outcome and disputes if circumstances change.
A deed of trust removes that uncertainty by setting out each person’s share in black and white. This matters most when people have contributed different amounts, when a family member has helped with the deposit, or when co-owners are unmarried and don’t have the legal protections that marriage or civil partnership provides. Rather than relying on memory or goodwill years down the line, the deed gives a clear, agreed record from the outset.
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What is a deed of trust used for?
A deed of trust is used to record and protect the financial arrangements between co-owners, covering a range of contributions and setting out what happens to each in the event of a sale.
Common things a deed of trust can record include:
- The deposit, including how much each owner and any third party contributed
- A gifted deposit from a parent or family member, so their contribution is recognised
- Mortgage repayments, where owners agree to pay different proportions
- Property renovations or improvements paid for by one owner
- Household bills and outgoings, where the split isn’t equal
- What happens if one owner wants to sell or buy the other out
By putting these details in writing, the deed makes sure the eventual division of sale proceeds reflects what each person genuinely put in.
Related: Top tips for planning your finances before you move
A deed of trust to protect money in property
The most common reason people put a deed of trust in place is to protect money invested in a property. If one person pays a larger deposit, contributes more to the mortgage, or funds a renovation, the deed makes sure that money is recognised when the property is sold. This is especially valuable where a parent or family member has gifted or lent money towards the purchase, as the deed can record that contribution and ring-fence it, even though they aren’t a named owner on the mortgage.
It’s worth knowing that a deed of trust governs the arrangement between the co-owners. It doesn’t change anyone’s obligations to the mortgage lender, as joint borrowers remain responsible for the whole loan between them.
The lender’s consent is sometimes needed, which a solicitor will check when drawing up the document.
How to get a deed of trust
A deed of trust is drawn up by a solicitor or conveyancer, usually at the time of purchase alongside the rest of the legal work. It can also be arranged later if your circumstances change, though it’s simplest to sort out when you buy.
The process is straightforward. Your solicitor will talk through everyone’s contributions and intentions, then draft a document that reflects them, including the ownership shares, how sale proceeds will be divided, and any arrangements such as buy-out terms. Because the deed needs to be executed correctly to be legally binding, having a solicitor prepare it is the sensible route. Where you own as tenants in common, your solicitor will usually also enter a restriction on the title at HM Land Registry, which helps protect each owner’s share.
Since a deed of trust is tailored to your specific circumstances, it’s always best to take proper legal advice so it reflects your intentions accurately.
Related: First time buyers: How to save for a deposit
Your deed of trust questions, answered
Is a deed of trust legally binding?
Yes. Once it’s signed by all parties and properly witnessed, a deed of trust is legally binding and can be relied on if there’s ever a dispute. It needs to be executed correctly to be enforceable, which is why it’s best prepared by a solicitor.
Is a deed of trust the same as a declaration of trust?
The terms are generally used to mean the same thing. A declaration of trust records who owns what share, and when it’s formally executed as a deed, it becomes a legally binding deed of trust. Most solicitors use the terms interchangeably.
Can a deed of trust be changed later?
Yes. Minor updates can be made through a deed of variation, while bigger changes, such as adding a new owner, are usually best handled with a new deed drafted by a solicitor.
Do you need a deed of trust if you’re married?
Not always, since married couples and civil partners have other legal protections. However, it can still be useful for recording unequal shares, for example where one partner has contributed significantly more.
Does a deed of trust get registered at the Land Registry?
The deed itself stays with your title documents rather than being registered. Where you own as tenants in common, though, your solicitor will usually enter a Form A restriction on the title, which flags that the property is held in shares.
Buying with someone else
Buying a home with a partner, friend, or family member is a big step, and setting out the financial side clearly from the start makes everything simpler down the line. A deed of trust is a practical way to do that, giving everyone involved a clear record of their contribution and their share.
If you’re buying a property and want to understand your options, speak with your local Whitegates branch.
