A declaration of trust is a valuable legal document that specifies the financial arrangements between two or more people who buy a property together but contribute unequal amounts to the deposit, mortgage payments and ongoing maintenance and upkeep expenses.
what is a declaration of trust?
A declaration of trust details all of the people involved in the transaction, the amount of money each person has contributed, the arrangements that have been agreed regarding funding the property and how the money from any future sale or buyout would be split When drafted with care, a declaration of trust can prevent disputes from arising in the future and provide clarity.
A declaration of trust is a legally binding document. However, there is a possibility that it could be challenged if one party believes that they were unduly influenced into signing it or later discovers that they have been a victim of misrepresentation.
What is undue influence?
If somebody is pressured into signing a contract against their will, they are said to be under undue influence. This is true, even if at the time of signing, they do not realise that undue influence is being exerted. Where it can be proved that someone was unduly influenced into signing a declaration of trust, it can invalidate that document.
What is misrepresentation?
Misrepresentation is a term that describes a situation that is not as intended. In the case of a declaration of trust, it would usually be used if one party’s contribution was incorrectly stated and thus put them at a disadvantage in the event of a future sale.
How do you dispute a declaration of trust?
If someone believed that they had been unduly influenced into signing a declaration of trust, or discovered that the declaration of trust was inaccurate with regards to their level of interest in the property, they should seek legal advice from a solicitor at the earliest opportunity.
Resolving disputes such as this requires a specialised skillset and the remedies available will differ based on the individual circumstances of each case.