Q&As

What happens where a trust is settled in respect of a residential property in favour of several beneficiaries, but there has been no formal declarations of trust or documents?

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Produced in partnership with Elizabeth England
Published on LexisPSL on 14/09/2016

The following Private Client Q&A produced in partnership with Elizabeth England provides comprehensive and up to date legal information covering:

  • What happens where a trust is settled in respect of a residential property in favour of several beneficiaries, but there has been no formal declarations of trust or documents?
  • Constructive trusts
  • Joint tenants and tenants in common

What happens where a trust is settled in respect of a residential property in favour of several beneficiaries, but there has been no formal declarations of trust or documents?

In all modern property transactions, the form TR1 completed by the purchaser(s) contains a box setting out how the owners will beneficially own the property. For more information, see Practice Note: Joint ownership.

Where express trusts of the beneficial interests are not declared, the presumption is that equity follows the law. Where there is one sole legal owner, they are also the sole beneficial owner. Where there is joint legal ownership, there is also joint beneficial ownership. The parties own and benefit from the whole equally.

If the owners declare they will be tenants in common, they could in fact be tenants in common in equal shares, or unequal shares. A tenant in common can point to their personal beneficial interest in the property.

In the absence of an express declaration of trust, the owners will automatically be beneficial joint tenants. They will own the whole equally. If they decide to sell the property, then the proceeds of the sale are distributed equally.

For more information on the rights of cohabitees and joint owners, see Practice Note: Occupation of the

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