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Aston Lawyer
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10233
Experience:  Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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I have a declaration of trust that has been prepared by my

Resolved Question:

I have a declaration of trust that has been prepared by my conveyancing solicitor. However I’m not comfortable with the wording and I wanted to have it re-written before I sign the document.
The situation is as follows. I have purchased a house with my girlfriend, I have contributed a large deposit (£52,000) towards the purchase price (£208,000), and my girlfriend is unable to contribute to the deposit. However we will be paying the bills equally and we are going to own the property as tenants in common with unequal shares. (Myself 62.5% my girlfriend 37.5%)
I want to ensure that in the unfortunate event of a breakup I will receive my deposit back as a percentage of the property (25% based on the £52,000 of the purchase price of £208,000).
I am concerned that the wording of my declaration of trust my mean I only receive 25% of the equity in the house when sold.
So for example if we sold the property immediately for the same price we purchased it for I may only receive (25% of the £52,000 equity in the property, which equates to £13,000)
The remaining equity after the first 25% share is to be divided equally between myself and my girlfriend.
So I may put £52,000 down as a deposit but only walk away with £13,000 (25% equity) +£ 19500 (half remaining equity) = £32500
I want a declaration of trust which is fair and ensures I receive 25% of the sale price back before the remaining equity is shared.
So for example if the property sells in 10 years for £416,000 I would receive 25% or £104,000 before the remaining equity is divided.
Submitted: 1 year ago.
Category: Law
Customer: replied 1 year ago.
This is my current prepared Declaration of Trust
Expert:  Aston Lawyer replied 1 year ago.
Hello and thanks for using Just Answer.
My name is ***** ***** am happy to assist you with your enquiry.
As regards ***** ***** the only change you need to make is as per the below-
(a) The first £52,000.00 or 25% of the gross Sale price which ever is the greater to the said ALAN ***** *****
I hope this assists and answers your question.
Kind Regards
Al
Customer: replied 1 year ago.
ThanksWhat does the term 'net proceeds' actually mean. And what would the first 25% of net proceeds amount to based on the current declaration of trust. If the property was sold immediately at the purchase price of £208,000thanks alan
Expert:  Aston Lawyer replied 1 year ago.
Hi Alan,
"Gross sale price" means the price the property is sold for.
"Net sale proceeds" means the Gross sale price LESS Estate Agents/Solicitors fees and whatever is outstanding under the Mortgage.
Hence, as you have paid £52,000, being 25% of the Purchase price, that is why I have amended the Declaration to say you should receive 25% of the gross sale price, and which is the normal and fair way!
On today's figures, the net sale proceeds would be £208,000 LESS the Mortgage amount of £156,000 and less your Solicitor and Estate Agents sale fees. you can then roughly calculate what 25% of this would be.
I hope this helps.
On a side point, you should NOT be holding the property as tenants in common in the percentages quoted of 62.5 and 37.5%. Instead, when preparing the Land Registry Transfer document, your Solicitor should be stipulating that you hold the property "as tenants in common in accordance with the terms of the Declaration of Trust made between the parties".
I hope this clarifies matters.
Kind Regards
Al
Customer: replied 1 year ago.
Thanks Aston.I have emailed my current solicitor with the amendment you suggestedHi Lucy is it possible to amend the declaration of trust to say,(a) The first £52,000.00 or 25% of the gross Sale price which ever is the greater to the said ALAN ***** *****however she will not accept this and her response was as follows,I note your comments however I am unable to refer to gross sale price as this wouldn’t take into consideration the reduction of legal fees, agents fee and mortgage redemption etc. It has to be referred to as Net sale proceeds.kind regardsAlan
Expert:  Aston Lawyer replied 1 year ago.
Hi Alan,
Thanks for your reply.
Well, I suppose Lucy has a point, so if she is not willing to accept the wording, it should be amended to read-
"The first £52,000 less the Solicitors and Estate Agents costs upon sale or 25% of the Sale price after deduction of the Solicitors and Estate Agents costs, whichever is the greater, to the said ALAN ***** *****".
I would certainly hope that Lucy would accept this.
I hope this helps.
If so, I would be grateful if you could rate my answer.
Kind Regards
Al
Aston Lawyer, Solicitor
Category: Law
Satisfied Customers: 10233
Experience: Solicitor LLB (Hons) 23 years of experience in Conveyancing and Property Law
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