SERVICES
Transfers of Equity
A transfer of equity is a transaction designed to change the way your property is owned without an actual sale taking place. It is where legal ownership of a property changes hands – for example where joint owners transfer the property into the sole name of one or other of them, or where a sole owner transfers the property into joint ownership.
In most cases a transfer of equity will be more straightforward than a sale or purchase between non-linked people. For example, searches or enquiries will be much more limited because the parties are likely already to have knowledge of the property and there is rarely a need for a contract.
The main complication tends to be where the property is subject to a mortgage since the consent of the lender will need to be obtained before the transfer can take place.
What is Involved in a Transfer of Equity?
Provided that everyone agrees as to what they want from the transaction, then the transfer of equity process will be straightforward, and we will help guide you through the process.
If the transfer of equity is taking place as part of a divorce, then it is likely that each party will have their own solicitor representing and advising them.
However, regardless of the parties involved the steps are:
- We will obtain details of the legal title to the property – either the deeds or an official copy of the title from H M Land Registry. We will then review the title to check for a mortgage or any other restrictions on the property. At this point, we will also need to ask for evidence of your identity so that we can comply with the strict money laundering duties the law places upon us.
- Next, we will draw up the transfer deed document ready to be signed.
- If the property is subject to a mortgage, then you will need the consent of the lender before a transfer can go ahead. If the property is being transferred subject to the current mortgage, the lender will need to be a party to the transfer deed. Sometimes, however, the mortgage will be paid off at the same time, in which case we will need to get a redemption figure from the lender.
- Once we have prepared the paperwork, the next step will be to get the various parties to sign it.
- Finally, once the transfer has taken place, we will need to register the details of the transfer at H M Land Registry. This will involve the payment of a fee.
Why might you need a transfer of equity?
There are various reasons as to why you might want to carry out a transfer of equity. A common one is because the owner of the property has entered into a new relationship or marriage and wishes to put the new partner/spouse onto the deeds of the house they will be living in.
Alternatively, a relationship may have broken down and the property is being transferred from joint names into the sole name of one of the parties to the relationship – for example following a separation or divorce. This may be as part of a court order to deal with the distribution of assets on divorce. The party taking the transfer may need to be able to demonstrate to a lender that they are able to make the mortgage payments on their own.
Finally, a transfer of equity may be for tax planning purposes. The ownership of a property may need to be transferred into the name of a third party (for example family member) to help reduce tax liabilities or to help ensure that the property remains in the family.
What will it cost?
There are two aspects to the costs of a transfer of equity - the fees that we charge for doing the work and the payments we need to make to others (called disbursements) on your behalf. Both will depend upon several factors including the value of the property, the nature of the transaction and where the property is situated.
We want you to be as clear as possible about the charges we will make and the additional payments that will be required. To find out more, please go to our “Pricing” page where you will see those charges set out and where you can obtain from us a quotation as to the actual cost for the property you are transferring. If you have any doubts as to those charges, please do not hesitate to contact us.
You may need to pay Stamp Duty Land Tax (SDLT) when transferring land or property. Several factors are considered when determining whether SDLT is payable, including the type of transfer and your marital status.
Guidelines from HMRC provide that SDLT may need to be paid “when all or part of an interest in land or property is transferred to you and you give anything of monetary value in exchange.” It is important to note that “anything of monetary value” includes not just cash but also the value of any mortgage taken on as part of the transfer. Please ask us if you are unsure as to the situation.
How long will it take?
How long your transfer of equity takes will depend on several factors including the property itself and how quickly the various parties, including a mortgage provider, is able to process the matter. Rest assured that we will always try and make sure that your transaction takes no longer than is absolutely necessary.
It is difficult to give a precise time for the transaction as it may be tied up with how long it takes for a matrimonial settlement to be reached. However, the actual legal work involved in the transfer should take no more than 3 to 6 weeks.
To ensure your transaction proceeds as quickly as possible we will always chase up the progress of your transaction and will not simply wait for something to happen. However, just because the transaction is not moving forwards does not mean that it is us that is holding it up.
Who will be carrying out the work?
Our residential conveyancing team has many years of collective experience in delivering high quality property-related work. Regardless of who works on your matter, they will be supervised by Vishal Sharma who is a partner in the Firm. You will find full details of the team on the “Meet the Team” page using the menu at the top of the screen.