There is a trust deed over my property: is it legally binding?

A trust deed – or express declaration of trust – is one of the clearest ways for co-owners to set out who owns what shares (equity) in a property, regardless of whose names appear on the legal title.

These documents are widely used by unmarried partners, family members, friends and investment partners to define their respective shares in property.

But, how binding are they in law? Can a party change their mind later, or argue that the deed should not stand? And can later conduct override what the parties originally put in writing?

When co-owners disagree about the validity of a trust deed and who owns what share of a property, such disputes are ultimately resolved under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA).

This article explains the circumstances in which trust deeds will be treated as binding, when they can be challenged, and how TOLATA is used to resolve disagreements about ownership.

The legal requirements for an express declaration of trust

An express declaration of trust is valid where the law’s three “certainties” are satisfied:

1. Certainty of intention – the parties must intend to create a trust.
2. Certainty of subject matter – the property and beneficial shares must be identifiable.
3. Certainty of objects – the identities of the ‘beneficiaries’ (those stated to have a share in the property) must be clear.

For property, section 53(1)(b) of the Law of Property Act 1925 requires the declaration to be evidenced in writing and signed by the person making it. Signing as a deed (in the presence of a witness) is common practice, but not legally essential. Any signed document satisfying the three certainties will meet the statutory requirement – meaning there is no need for signatures to be witnessed.

Most people think of a formal trust deed when asked whether a declaration of trust exists over their property. While a standalone document may indeed have been drafted, often there is no separate deed at all. In many cases, the Transfer Form (TR1) signed when buying the property contains a binding declaration of trust – even if the parties did not appreciate that at the time.

If one of the relevant boxes has been ticked in the TR1, this carries the same legal weight as a standalone declaration of trust.

In some circumstances, other – less formal – documents signed during the conveyancing process might be said to satisfy section 53(1)(b). A common example is when buyers sign a form instructing their conveyancer that they wish to hold the property as joint tenants or tenants in common. This may amount to written evidence of a binding declaration. Care is therefore needed both at the time of purchase and later, when reviewing conveyancing files in the context of a dispute.

What is the legal effect of a trust deed?

Case law tells us that declarations of trust are conclusive evidence of each person’s share in the property at the point of purchase.

This means that where a declaration of trust exists, courts are generally reluctant to look behind it and re-calculate contributions – unless there is a recognised legal ground for doing so.

For example, if Buddy and Jovie buy a property together in joint names and sign a declaration of trust stating they hold it in equal shares, that declaration will stand even if Buddy paid all of the deposit and Jovie paid nothing.

This can create real difficulties for individuals who contribute more financially at the outset in the expectation that the relationship will last, only for it to break down shortly afterwards.

Can later behaviour override a trust deed?

The courts recognise that an express trust may not always reflect the parties’ ongoing intentions.

In Nilsson v Cynberg [2024] EWHC 2164 (Ch), the court confirmed that an express declaration of trust can be displaced by a later agreement, even where that agreement is not written down.

This broadens the scope for parties to depart from earlier trust deeds and rely on later conversations or conduct to establish their beneficial shares.

These arguments are based on the doctrine of common intention constructive trusts – which can arise automatically when two people share an intention about ownership that is not formally recorded, and one party acts to their detriment in reliance on that intention.

In Nilsson, the parties bought a property with a declaration of trust recording equal shares. After separation, Mr Cynberg stated he did not want an interest in the property and was content for Mrs Cynberg to have the whole asset. She then paid all expenditure with no further contribution from him. When he later sought a share, she successfully argued that the trust deed had been varied by their subsequent informal agreement, upon which she had relied.

This shows that while trust deeds are strong evidence of ownership, they are not always final.

When can a trust deed be challenged?

There are several legal grounds on which a trust deed may be set aside, rectified or rendered non-binding.

1. Fraud

A trust deed created or signed as a result of fraud may be void. Examples include:

• Forged signatures.
• Deliberate misrepresentation as to the nature or effect of the document.
• Concealment of material facts used to induce the signature.

If fraud is proven, the deed will be set aside and the beneficial shares determined as if it never existed.

2. Undue influence

Undue influence ensures that one person’s influence over another is not abused. If a party’s free will was overborne, the deed may be invalidated.

Undue influence may be:

• Actual: overt pressure or coercion.
• Presumed: where a relationship of trust exists and the transaction calls for explanation.

Certain relationships – such as parent/child (but not child/parent), solicitor/client, trustee/beneficiary, and various advisory relationships – may give rise to a presumption of influence. In such cases, the burden shifts to the other party to prove the transaction was freely entered into.

3. Duress

Duress involves unlawful pressure (threats, intimidation, economic coercion). A deed entered under duress will be set aside.

4. Mistake

A trust deed may be challenged for common or unilateral mistake.

• Common mistake: both parties intended one thing, but the document records another (e.g. agreed 60/40 shares but recorded 50/50).
• Unilateral mistake: one party signs under a mistaken belief about the terms, and the other party is aware of the mistake and fails to correct it.

The court may:

• set aside the deed entirely, or
• rectify it to reflect the parties’ true intended agreement.

Rectification is often the preferred remedy where the parties had a clear common intention that the written deed failed to record accurately – but there must be sufficient evidence of what was actually intended.

Key takeaway: trust deeds are powerful – but not untouchable

Express declarations of trust remain one of the most robust mechanisms for fixing beneficial ownership between co-owners. They are usually conclusive evidence of the beneficial shares in a property. But they are not immune from challenge.

Ultimately, any dispute over beneficial ownership will be determined by the court under TOLATA, including:

• Whether a binding declaration of trust exists.
• Whether it should be set aside for fraud, undue influence, mistake or duress.
• Whether later conduct or agreement has varied the trust.
• What each party’s beneficial share should now be.

Because significant financial consequences flow from declarations of trust, anyone buying a joint property or involved in a dispute should obtain specialist advice.

For more information about the topics covered in this article, please contact Laura Tanguay or another member of the Home Ownership Disputes Team.