What Exactly is a Deed of Trust?
A Deed of Trust is a legal document that records the financial arrangements of joint owners of a property and other parties who have a financial interest in it. The content of the Deed of Trust reflects the wishes of the owners and sets out how much money each person is putting in and how much money each person should receive when the property is sold. The aim is to make the Deed as watertight as possible to anticipate all future areas of potential disagreement. It can also cover:
- Each person’s share in the property
- The extra money one person may have put in at a later date – for example, in renovations
- How much each person is responsible for in outgoings such as mortgage repayments, household and other bills, and maintenance
- Whether a third party has invested money and is not listed on the property title deed but still wants to protect their contribution
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The well-publicised Bank of Mum and Dad scenario and cohabiting couples are two well-known examples where a Deed of Trust may be used. One less common scenario is where unrelated investors purchase property as a buy to let. To take a local example, Stoke-on-Trent has been identified as one of the best areas in the UK in which to invest in property.
Valuing the property
A Deed of Trust can outline some, if not all, of the points covered in the first paragraph and can also lay down what is to happen when one party is unable or unwilling to buy the other out or wants to surrender their interest in the property. The Deed of Trust will detail, in the event of disagreement over value, that a local solicitor such as https://www.samconveyancing.co.uk/Homebuyers-Survey/Home-Buyers-Survey-Stoke-on-Trent, in this case, instruct a home owners survey for this purpose.
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Surveys vary in complexity from a straightforward valuation to full a structural and subsidence survey. Purchasers, investors and institutions should all bear in mind that it is unwise to purchase a property in any part of the country without at least a home buyers survey Stoke on Trent being no exception
In addition to the protection given by a Deed of Trust, legal advice should be taken regarding the tax and planning implications that come with buying property jointly.