What is a deed of trust?
A deed of trust is a legal document that sets out how ownership of a property is divided between two or more people. It clarifies each owner’s financial contribution and establishes how proceeds will be shared if the property is sold. This agreement provides protection and transparency for joint buyers, especially if they contribute unequal deposits or mortgage payments.
What Is a Deed of Trust on a property?
A deed of trust, sometimes called a trust deed, defines the ownership shares of a property. When two or more people buy a property together, they can choose to own it as either:
- Joint tenants – both own the property equally, and ownership automatically passes to the other if one dies.
- Tenants in common – each owns a defined percentage of the property, which can be unequal and passed on through a will.
The deed ensures each party receives their fair share if the property is sold, and their interest is legally recognised.
Why do you need a Deed of Trust?
A deed of trust is useful if buyers:
- Contribute different amounts towards the deposit or mortgage
- Are unmarried partners, friends, or relatives purchasing together
- Want to protect financial contributions in case of separation or sale
It acts as a safeguard, preventing future disputes and making it clear how sale proceeds or liabilities will be divided.
How much does a Deed of Trust Cost?
A deed of trust is usually prepared by a conveyancing solicitor and costs between £100 and £1,000, depending on complexity.
If included in the conveyancing process before purchase, it is often cheaper than arranging one later.
Deed of Trust vs Mortgage
A deed of trust is not the same as a mortgage.
- A mortgage is a financial agreement between the borrower and the lender.
- A deed of trust is an agreement between co-owners of the property (and any third party who has a financial interest, such as parents who contributed to the deposit).
Mortgage lenders may request details of the deed if a non-mortgage holder has a stake in the property.
Is a Deed of Trust the same as a Declaration of Trust?
The terms are often used interchangeably, but they are different:
- A Declaration of Trust simply states who owns what share of a property. It is not legally binding unless executed as a deed.
- A Deed of Trust includes the declaration but must be witnessed and signed, making it a legally enforceable document.
What does a Deed of Trust include?
A typical deed of trust contains:
- Names of the parties with a stake in the property
- Their contributions towards the purchase price, purchase costs, and any renovations or improvements to the property
- Each party’s share in the property
When Can You Get a Deed of Trust?
You can set up a deed of trust before purchase or after completion.
If it’s created later, a current property valuation must be agreed upon by all parties. Solicitors usually handle the drafting to ensure it reflects current ownership shares accurately.
Who Can Witness a Deed of Trust?
Any independent adult over 18 with full mental capacity can act as a witness, provided they are not related to any of the signatories. The deed becomes legally binding only once all signatures are witnessed.
Does a Deed of Trust need to be registered at the land registry?
No, a deed of trust does not have to be logged on the title deeds. It is entirely up to the signatories to the deed of trust whether it is registered with the Land Registry. If it is this means that the property can only be sold with the consent of the people named in the deed of trust.
Can a Deed of Trust be changed?
Yes. A deed of trust can be amended if ownership shares or circumstances change.
Minor variations can be added, but for significant adjustments - such as a new owner being added or large equity changes - it’s best to have a new deed drafted by a solicitor.
What Happens to a Deed of Trust if someone dies?
The deed of trust will usually include a clause that stipulates what happens in the event of the death of a signatory. Reference is made to the Will of the deceased, which override the terms of the deed of trust. The other signatories to the deed will have to abide by the terms of the deed, the late person’s Will or the intestate rights of their next of kin.
What if someone gets married after signing a Deed of Trust?
A deed of trust can still provide an indication of a signatory’s intentions, but when a couple get married, the deed will in legal terms be superseded by the Matrimonial Causes Act 1973. A married couple can consider getting a pre-nuptial or post-nuptial agreement, which can be contrary to the terms of the Matrimonial Causes Act.
Let us value your property
If you are thinking of drawing up a deed of trust, we can help by providing a valuation of the property. Simply get in touch with your local haart branch.