How to own a house without being on the legal title?
If you own a house then you will have your title registered at the Land Registry. That is simple enough. No more than four people can be registered as the legal owners and it should go without saying that all owners must be 18 or over and not bankrupt.
So how can you be an owner without a registered title?
Answer: A Declaration of Trust.
Under English law, ownership of the legal title of a house is distinct from the ownership of the beneficial title. In essence, this means that you may own the house but are not entitled to the proceeds of sale when it is sold.
This is arranged by the legal owners stating that they hold the property under a trust on whatever terms set out in the trust deed. The trust can be very flexible and protect monies invested or ensure someone has the right to live in a house.
Some common uses are:-
- Protect parents’ capital invested in a son or daughter’s first purchase
- Protect unequal contributions of capital to a purchase by unmarried couples and provision for sale if required by one partner.
- Set out the terms and proportions under which a commercial property may be held by business partners
- Help protect capital asset of a couple where one owner is self-employed and may be liable to future substantial financial claims against his business.
To be most effective, Declarations of Trust should be signed when the property is first purchased. Remember always take legal advice to ensure that all parties to the document receive independent legal advice.
Member of Solicitors for the Elderly.