Declaration of Trust, Joint Tenancy, Tenants in Common: What They Are, and Why Two People Buying a House Together Might Need Them

If you're buying a property with someone else; a partner, a friend, a sibling... there's a very important decision buried in the paperwork that most people breeze past without really understanding: Should your ownership status be Joint Tenants or Tenants in Common?

It sounds like a technicality, but it really isn't.

Get it wrong, or leave it undocumented, and it can cost you (or your children) your share of your house, years later.

This post explains what the choice actually means, where a Declaration of Trust fits in, and why, in some situations, you might need to sort out both your ownership status and a Declaration of Trust before you're properly protected.

Two ways to own a property together

When two (or more) people buy a home jointly, English law gives you two options for how you hold it (but by default tends to choose Joint Tenants):

Joint Tenancy

You and the other owner(s) own the whole property together; there's no such thing as "your half" or "your 60%."

The defining feature is the right of survivorship: if one owner dies, their interest automatically passes to the surviving owner(s), regardless of what their will says.

This is the default most couples end up with, often without really choosing it.

It also means that, the children of the deceased may no longer be beneficiaries of their parents share of the property.

Tenants in Common

Each owner holds a specific, defined share; which can be equal (50/50) or unequal (say, 70/30) reflecting who put in the bigger deposit).

There's no automatic survivorship.

If one owner dies, their share passes according to their will (or the intestacy rules if they don't have one) NOT automatically to the co-owner.

Most people don't realise, that even a valid will can't pass their share of a house to their beneficiaries, if the property isn't held under Tenants in Common.

So what's a Declaration of Trust?

A Declaration of Trust (sometimes called a Deed of Trust) is a separate legal document that sets out the detail behind a Tenants in Common arrangement.

Being registered as Tenants in Common tells the Land Registry that ownership isn't split automatically 50/50 on death, but it doesn't, by itself, record what the shares actually are or what happens in various scenarios.

That's what a Declaration of Trust is for.

A properly drafted one typically covers:

• The exact percentage split, and why (e.g. one party contributed a larger deposit)

• Whether any contribution was a gift, a loan, or an outright ownership stake

• How proceeds are divided if the property is sold — including repaying any loan-style contributions before splitting the rest

• What happens if one owner wants to sell and the other doesn't

• How future costs (mortgage overpayments, renovations) affect the split over time

Without this document, two people can technically be Tenants in Common but have nothing in writing about what their shares are; which is exactly the kind of ambiguity that turns into a dispute (or an expensive court case) down the line if the shares are not intended to be equal.

Is it either Joint Tenancy/Tenants in Common, or a Declaration of Trust (or could you need both)?

This is where people get confused, so here's the short version: they're not alternatives to each other.

Tenants in Common is the status. A Declaration of Trust is the substance. In most cases where unequal shares are involved, you need both.

There's also a specific scenario worth flagging: what if you're already Joint Tenants and want to change to unequal shares?

This comes up more than you'd think; couples who bought years ago as Joint Tenants (often the default, done without much thought at the time), whose circumstances have since changed:

• They've separated but still co-own the property for now

• One person has put a lump sum into the property since; an inheritance, a business exit, a bonus

• They want the security of defined shares rather than "winner takes all" survivorship

Because Joint Tenancy is legally an undivided whole - you can't own "60%" of a joint tenancy.... you can't simply declare unequal shares while still Joint Tenants.

The ownership structure has to change first.

So the two-step process looks like this:

1. Serve a Notice of Severance; a formal notice (under Section 36 of the Law of Property Act 1925) that converts the Joint Tenancy into a Tenants in Common arrangement. This gets registered as a restriction at the Land Registry.

2. Then put a Declaration of Trust in place; setting out what the shares actually are, and the mechanics around them. (This requires a solicitor).

You can't skip step one, or a Declaration of Trust specifying unequal shares would directly contradict what's on the Land Registry; so you must ensure Tenants in Common status if you wnat to use a Declaration of Trust.

When this typically comes up

• Unmarried couples buying together where one has put in a larger deposit

• One partner using an inheritance, business sale proceeds, or investment gains for a deposit; and wanting that protected

• A remortgage or extension where one person's contribution has grown disproportionately

• Blended families, where someone wants to protect a share of the property for their own children while still co-owning with a new partner

What this means practically

If you're buying with someone else and putting in unequal amounts, don't assume the paperwork "just sorts itself out." Ask specifically:

• Are we being registered as Joint Tenants or Tenants in Common?

• If Tenants in Common, is there a Declaration of Trust recording the actual shares?

• If we're already Joint Tenants and want to change that, has a Notice of Severance actually been served and registered?

Drafting the Declaration of Trust, where the wording around disputes and buy-outs really matters, is a job for a solicitor or licensed conveyancer, not a DIY template.

However, to change from Joint Tenants to Tenants in Common, you can go to the online tool here, which will guide you through the process, and help you complete the paperwork.

But understanding the difference before you walk into that meeting means you'll ask the right questions and won't be caught out later.

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This article is for general information and doesn't constitute legal or financial advice. If you're buying a property with someone else, speak to a solicitor about your specific circumstances.

For more useful tools to help with your estate planning, visit www.nigglystuff.co.uk.