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james bruce
james bruce, Solicitor-Advocate
Category: Property Law
Satisfied Customers: 7515
Experience:  Owner at James Bruce Solicitors
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I need some help with Declaration of Trust between me and my

Customer Question

Hello there. I need some help with Declaration of Trust between me and my partner.
JA: What are you located? It matters because laws vary by location.
Customer: London, UK
JA: Has anything been filed or reported?
Customer: no
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: no
Submitted: 12 days ago.
Category: Property Law
Customer: replied 12 days ago.
Good afternoon,I am seeking advice on a Deed of Trust me and my partner are drafting at the moment.
We have just won an auction property and applied for a mortgage together via mortgage broker.Main issue We are having is that my partner is putting ALL the deposit and I am only contributing with my income and ability to add £130 000 to the mortgage borrowing.I will be living in this new house but I will only be paying £450 out of £1900 of monthly mortgage payments.
He will also pay all the maintenance, legal fees etc.How should we draft the deed of trust so it’s mathematically correct and fair since I am not putting any money towards the deposit.
Customer: replied 12 days ago.
His deposit is £400k, mine is £0.
Customer: replied 12 days ago.
We are borrowing £500k from the bank.
He is not a first time buyer.
I am.
Expert:  james bruce replied 12 days ago.
Hello, I hope you are well. My name is***** am a solicitor advocate and  I will be assisting you with your question today. I am very sorry to hear of the problem you are experiencing and I will do my best to help you with this matter. 

The usual way to do this, is to draft the deed to protect the initial deposit amount, in this case £400k. So if the property is sold in the future he would get that before any equity is divided.

As for contribution s to the mortgage. That is usually what each person puts in. You may pay less each month, but contribute other ways to the property, such as cleaning, house wife etc.

Living together often means different contribution. and they are just taken on the chin as part of living together.

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Customer: replied 12 days ago.
We would like to treat this as a business arrangement of me helping him buy this property.
I would like to be bought OUT of the mortgage and lease within 2-5 years time.Our initial agreement was to buy me out with 1% of the value of the property at that time. So if the value of the property in 3 years time is 1.4 million then I am bought out for £14 000
Customer: replied 12 days ago.
I do not want to stay on the lease for longer than 5 years as I have my own plans to acquire something my own.
Customer: replied 12 days ago.
I need a solicitor to tell me if 1% is enough/sufficient/mathematically correct amount of money to pay me for my time in mortgage agreement and the fact that I am giving up my first time buyers rights.
Customer: replied 12 days ago.
As mentioned above his deposit is £400, mine is £0. He will pay all the fees and maintenance of the house. I will be paying my “rent” while living there which will be £450.
Customer: replied 12 days ago.
Total mortgage payments per month £1900
Expert:  james bruce replied 12 days ago.

A solicitor cannot tell you that. Any financial agreement is between the two of you. You would need to decide what future you are willing to accept as the buy out figure. There is no legal minimum or maximum. The choice is yours.

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Customer: replied 12 days ago.
Therefore - deposit £400 000, joint borrowing from bank £500 000, out of which £150 000 comes from my salary and £350 000 from his.
Customer: replied 12 days ago.
Could you give me an example, I’m sure you have seen these situations before.
Customer: replied 12 days ago.
I am just unsure what is the “right” / “fair” amount
Customer: replied 12 days ago.
Also, could you explain to me what risks am I taking by going into a joint mortgage?
Expert:  james bruce replied 12 days ago.

Sorry as a solicitor we are not allowed to give financial advice, there are rules regarding that.

We can advice on the law of such matters only. Therefore the % would need to be what you feel ie fair.

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Customer: replied 12 days ago.
Also do we need to sign a cohabitance….something? Sorry I forgot what’s the name of the contract.
Expert:  james bruce replied 12 days ago.

No, that is not required. The mortgage is in joint names, therefore your property.

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Customer: replied 12 days ago.
Also, could you explain to me what risks am I taking by going into a joint mortgage?
Expert:  james bruce replied 12 days ago.

A  joint mortgage is a joint debt. So if the other party defaults on this you remain liable.

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Customer: replied 12 days ago.
Thank you. And Where could I get the advice on how much I should be asking to be paid back?
Expert:  james bruce replied 12 days ago.

A financial advisor would be best.

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Customer: replied 12 days ago.
Ok thank you for your help.
Expert:  james bruce replied 12 days ago.

Your welcome.

Thank you for using Just Answer and for allowing me to assist you with your legal enquiry. I am pleased I was able to be of assistance. Please do not hesitate to come back to me for further advice on this or any other legal matter. It will be my pleasure to be able to assist you again.

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