199 lines
5.0 KiB
Plaintext
Executable File
199 lines
5.0 KiB
Plaintext
Executable File
property
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propertyadvice
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propertyclinic
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7615597
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-----
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# Declarations of trust
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## Continuing the series in which our Clinic experts provide a guide to those
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thorny issues that can trip up the unwary, this week, David Fleming on
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declarations of trust.
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By David Fleming 6:55AM BST 22 Apr 2010
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[Comments][1]
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**What is a declaration of trust?**
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A trust arises where the "paper" or "legal" owner shown on the title deeds or
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Land Registry entries is not the same as the "true" owner. Lawyers usually
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refer to the latter as the "beneficial" or "equitable" owner. A declaration of
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trust is a document whereby the legal owner says that he will hold the
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property on trust for the beneficial owner.
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**When is it used?**
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For example, no more than four people can hold the legal title to a property.
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So, if a house is to belong to more than that, the legal owner or owners have
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to make a declaration stating that they hold it on trust for the beneficial
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owners.
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## Related Articles
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* [Using a managing agent][2]
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14 Apr 2010
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* [Property clinic: Money matters][3]
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16 Apr 2010
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* [Property clinic: Bricks & mortar][4]
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15 Apr 2010
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* [Property clinic: Points of law][5]
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14 Apr 2010
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* [How to sublet a flat][6]
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08 Apr 2010
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* [Property clinic: The market][7]
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25 Feb 2010
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Declarations of trust are also often used where it would be difficult to
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transfer the legal title. For example, if you own a property subject to a
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mortgage and want to give it to your wife, then it might be easier to enter
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into a declaration of trust in her favour rather than having to involve the
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mortgagee. Of course you would still be responsible for ensuring the mortgage
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was paid.
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Similarly, children cannot be shown as legal owners of a property. So if
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beneficiaries to a will are under 18, the trustees named in the will would
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hold it for them.
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**Are declarations of trust always voluntary?**
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No, in some cases the law imposes a trust. A common example is where somebody
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buys a property but another person contributes all or part of the cost. In
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those circumstances a "resulting trust" arises in favour of the contributor.
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The courts have to determine what that person's share should be.
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Similarly a "constructive" trust can arise where an elderly person asks
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someone to look after them and promises to leave them their property, but
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fails to make a will.
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**Who holds the power?**
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It is often not as satisfactory to hold an interest under a declaration of
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trust as it is to hold the paper title because the legal owner retains the
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power to sell or mortgage the property.
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Theoretically the beneficial owner can sell their interest but no buyer would
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proceed on that basis. So, if the legal owner refuses to sell, the beneficial
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owner must make an application to the court to have the title transferred to
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them.
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With registered land it is possible to impose a restriction preventing a sole
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legal owner from selling; he would have to appoint a second trustee first. The
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idea is that it's less likely two people would commit fraud.
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* Send your property problems to: Property Clinic, The Daily Telegraph, 111
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Buckingham Palace Road, London SW1W 0DT email:
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[propertyclinic@telegraph.co.uk][8]
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* Our experts regret that they cannot answer readers' letters personally.
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All correspondence should be sent to them at the address given above. We
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regret that we cannot acknowledge letters. Please keep them brief
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[X][9] Share & bookmark
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[What are these?][10]
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* Share: [Share][9] [ ][11] [ ][12]
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[Tweet][13]
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http://www.telegraph.co.uk/property/propertyadvice/propertyclinic/7615597
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/Declarations-of-trust.html
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Telegraph
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## [Property Clinic][14]
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* ### [Lifestyle »][15]
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* ### [Property »][16]
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* ### [Property Advice »][17]
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External Links
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* ### [Land Registry][18]
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In property
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[![Twenty-four-hour party people: noisyneighbours can turn even the loveliest
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of houses into a waking nightmare][19] ][20]
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### [Property clinic: Noisy neighbours][20]
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[![House Doctor DIY: whether you are papering walls or ceilings, it pays to
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have a helper at hand, says David Snell][21] ][22]
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### [Doctor in the House: wallpaper worries][22]
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[![I spy: neighbours are not responsible for subcontractors
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][23] ][24]
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### [Property clinic: How responsible are our neighbours?][24]
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[![Building regulations and energy efficiency: The new elemental U values
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applies to flat roofs, external walls, glazing and roof lights][25] ][26]
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### [Building regulations and energy efficiency][26]
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[X][9] Share & bookmark
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Delicious Facebook Google Messenger Reddit Twitter
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Digg Fark LinkedIn Google Buzz StumbleUpon Y! Buzz
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[What are these?][10]
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Share:
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* [ ][9]
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* [ ][11]
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* [ ][12]
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* [Tweet][13]
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* Advertisement
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![][27]
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telegraphuk
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Please enable JavaScript to view the [comments powered by Disqus.][28] [blog
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