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Clare
Clare, Solicitor
Category: Property Law
Satisfied Customers: 34280
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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I have a quick question on a deed of trust, slightly

Customer Question

Hi,
I have a quick question on a deed of trust, slightly complicated but wondered if possible to document in a legal document.
I have been living with my girlfriend for a while and the property is in her name, but to make life easier for her I want to pay more on the mortgage and just wondered how we could document this in deed of trust or other legal document.
Property value is approx. 700k
Mortgage outstanding 390k
So far I have invested 25k in house with my girlfriend having approx. 285K capital.
Plan is to get a mortgage but I would pay 2/3rds and she would pay a 1/3rd of mortgage. If £2100 I would pay £1400, she would pay £700
Is there a deed of trust to cover what share of property we own if sold at later date or we separated? assuming property value will increase
Thanks
Submitted: 2 years ago.
Category: Property Law
Expert:  Clare replied 2 years ago.
HiThank you for your questionMy name is ***** ***** I shall do my best to help youWill you be taking out a new mortgage together?
Customer: replied 2 years ago.

Hi Clare,

Actually she will be doing the mortgage solely in her name as I have had financial issues in the past and cannot get the mortgage.

Up to now I have just been paying rent to her, but we want to make the arrangement more formal before we get married.

Expert:  Clare replied 2 years ago.
In that case the document you will need will indeed be a Deed of Trust so that there is evidence that whilst the property is legally held in her sole name she holds it on behalf of both of youYou will need to decide how you wish the proceeds of sale to be shared - one option could be that you each receive the return of your capital investment and then the balance is shared between you.This deed can be registered at the Land Registry - but it will be of less importance if you actually marryI hope that this is of assistance - please ask if you need further details
Customer: replied 2 years ago.

Hi Clare,

Sounds like deed of trust is the option from what I have read online, but is there an agreed legal formula for this which is fair. I guess must happen a lot.

As I said if initial investment was 25k me, 285k partner.

We then split the mortgage of 390k 2/3rds to me and 1/3rd to us how would this be documented.

I don't understand what the profit share would be, lets say we paid 90k off mortgage, leaving 300k and the property increased 100k and sold for 800k how you could work out fair percentages when selling?

This is where I'm confused

Thanks

Expert:  Clare replied 2 years ago.
That is a matter of what you decide between you.There are various ways of doing itOne is to say that you will each receive your original investment back from the proceeds of sale and then the balance is divided - either 50/50 to reflect your relationship - or 2/3 -1/3 to reflect the mortgage payments.Another is to say that you will each receive a percentage of the proceeds to reflect the investment you are each making - in her case an initial 40% plus 19% to cover her share of the mortgage and in yours 3% plus 38% This would not be particularly good for her in the short term a if there was an early sale she would lose some of her original investment
Clare and other Property Law Specialists are ready to help you
Customer: replied 2 years ago.

Hi Clare,

That's great thanks, ***** ***** way to go. The only issue is getting the property valued, I guess to get a valuation survey done to cover us both.

Are there any particular valuation companies you would recommend?

Thanks

Simon

Expert:  Clare replied 2 years ago.

If you are remortgaging then using the mortgage companies figure is as good as any