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Clare
Clare, Solicitor
Category: Property Law
Satisfied Customers: 34105
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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Can I take a second charge over a property I own - to

Resolved Question:

Can I take a second charge over a property I own - to protect the funds i've put in as a deposit?
Submitted: 12 months ago.
Category: Property Law
Expert:  Buachaill replied 12 months ago.

1. Dear Shahin, you can't be both owner of a property and the holder of a charge over it. In other words, you cannot charge your own property in your own favour. It is only a third party who can hold a charge over your property. Your ownership (and the deposit funds) are protected by your name appearing on the Folio in the Land Registry (the Title deeds). You don't need to and it is not possible legally, ,to create a second charge over your own property to safeguard deposit funds you have put in.

Expert:  Buachaill replied 12 months ago.

2. Please Rate the answer as unless you Rate the answer your Expert will receive no payment for answering your question.

Expert:  Clare replied 12 months ago.

My name is ***** ***** I have been a solicitor for more than 30 years.

My colleague is correct you cannot take a Charge out - but you can protect your investment either by owning the property as Tenants in Common in unequal shares or by way of a Declaration of trust

Customer: replied 11 months ago.
thanks both - how do I protect the money that I have put into the property whilst I am going through divorce and making sure that my contribution is recognised as needing to be protected?
Expert:  Buachaill replied 11 months ago.

3 . In what shares is the property owned at the moment? Whose names are ***** ***** title deeds and in what proportion? Be aware that both owning the property in unequal shares as tenants in common and making a declaration of trust require the consent of the other co-owner, so they will not be options if you are in a divorce situation.

Customer: replied 11 months ago.
the property is owned 100% in my name. Can I make a declaration of trust for the amount of deposit I put in £100k - to pay for school fees for children?
Expert:  Buachaill replied 11 months ago.

4. Yes, you can make a declaration of trust for the amount of the deposit you put in. However, I would caution you that this will not protect the property in a divorce scenario because a divorce court can unlock trusts and make an order which it considers just. However, you can certainly make a Declaration of Trust for the 100k and use it to pay school fees for your children.

Customer: replied 11 months ago.
Thanks - does having a declaration of trust on a property affect the ability to remortgage a property in the future and also if there are several properties is it better to have a declaration of trust for each property or one to cover all of them - all for school fees.
Expert:  Buachaill replied 11 months ago.

5. You are better off to have a separate Declaration of Trust for each property rather than one for all of them. That way a court is less likely to attack them. It is also more transparent if they are for school fees.

Expert:  Clare replied 11 months ago.

Since you own the property a Declaration of Trust is not possible.

That would only be relevant if the property was held in joint names

It is for the court to decide what is a fair distribution

Customer: replied 11 months ago.
Thanks Clare - have got conflicting advice between you and Buachaill who says a Declaration of Trust is possible on a property I own 100%. Don't know whose advice is correct.
Expert:  Clare replied 11 months ago.

You cannot have a Declaration of Trust in your favour on a property that you own - since you already own it.

It would only be a possibility if the Declaration of Trust stating that you own the property on behalf of yourself and someone else - the opposite of what you wish to achieve

Customer: replied 11 months ago.
Thanks Clare - what if the property is being held by me to pay school fees for children?
Expert:  Buachaill replied 11 months ago.

A declaration of trust is always possible in favour of your children for their school fees. You were never going to make a declaration of trust in your own favour where you owned the property. That was not suggested. I am also sure you have no obligation in making a Declaration of Trust in favour of your children so they can pay their school fees out of this property interest, in spite of what that other Expert Clare would state.

Expert:  Clare replied 11 months ago.

A Declaration of Trust in respect of the school fees of your minor children will have no validity.

There is no legal obligation on the children to pay their school fees and accordingly you would need to create a format Trust, with Trustees and vest the property in them if that is what you wish to achieve

In addition none of this will actually protect the funds in the event of a divorce

Clare, Solicitor
Category: Property Law
Satisfied Customers: 34105
Experience: I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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