Is registration of restrictions in deed of trust at Land Registry compulsory?

Hi Fei,

A Declaration of Trust ,which you are describing as a Deed of trust, enables the ownership of equity and rental profits to be adjusted and legally documented without disturbing the legal title or existing mortgage arrangements. For example, the share of ownership can be adjusted or a spouse can be added.

Please see our web page on this topic >> https://www.property118.com/ownership-restructuring-tax-purposes/

It is not compulsory to register a restriction at HM Land Registry

However, given the circumstances you have outlined, failure to register the restriction would leave one of the JV partners wide open to being defrauded.

Hi Mark and Neil,

Many thanks for the answer.

The decision to not register is a joint decision agreed willingly by all parties including the one not on the title deed.

Would you like to recommend a solicitor who share similar opinion with you, ie adding restriction in deed of trust, but agreeing not registering at Land Registry. I have been asking around in London market and nearly all solicitor say that we must register without hearing the clients out.

Looking forward to hearing from you.

Regards,

Fei

Mobile: 07403 247 859

Reply to the comment left by “Fei Yu” at “18/07/2016 – 17:59“:

Mark Smith (Barrister-at-Law) is the Head of Chambers at Cotswold Barristers and he’s also the Hon. Legal Counsel for Property118 Action Group. You can view his member profile here https://www.property118.com/member/?id=1945

He will be able to confirm what we have said.
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I would add that a Declaration of Trust, commonly referred to as a Trust deed, is not a guarantee that all parties to the Trust will observe the ‘restrictions’.

If one party breaks the terms of the Trust, and a dispute ensues, the other party must go to the Chancery Division of the High Court, which can be extremely expensive, and doesn’t happen quickly. If you don’t have the cash to take legal action, you could find yourself in deep trouble, while the other party continues to take the benefit from the property.

Also, even if you are the wronged party, you will remain responsible for whatever percentage of the costs and commitments you have detailed in the Trust e.g. mortgage, service charges, insurance, etc…

Supposed good friends can easily fall out over money. Please do not leave anything to chance …or trust!

Reply to the comment left by “Lou Valdini” at “19/07/2016 – 09:54“:

That is very good advice Lou, well done!

You have added clarity to the advice that my comment was alluding to.

Not registering a restriction is usually fine for a BICT arrangement because it is usually the same person in control of the company as the owner of the property. When it comes to a JV arrangement involving third parties, even close friends and family, one can never be too careful. We must all be mindful of the old adage “money is the route to all evil”.
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Money!!! I have a close friend who has lost out to the tune of some £100,000, including legal costs of £50,000, to her supposed ‘trusted’ partner who she split with when he had an affair, but he refused to sell their joint property while living in and excluding her from it, and then moved his ‘girlfiend’ in against the terms of their Trust Deed.

I wish I could name and shame them without being sued for defamation!