The legal process used to add or remove someone from the title deeds of a property is known as the transfer of equity. There could be many reasons why one may decide to use this legal process:
- Upon a breakdown of a relationship – a transfer of equity would be used here to divide up the assets.
- Entering a new relationship – transfer of equity could be used to add your new partner to the deeds.
- Buying out the equity of a joint owner – transfer of equity could be used here family members want to transfer equity to their children or any other family member to be more tax efficient.
This can be a simple legal process if all parties involved agree on the outcome, as no searches would need to be carried out. Alternatively, it is important to look at each transaction independently as this process can become more complex because of disagreements or if mortgages are involved.
There are two types of property transfers:
- Full transfer of ownership – this is carried out when the whole property is being gifted to another person.
- Part transfer of ownership – this is when a sole owner wishes to transfer a share in the property to someone else.
What are the key stages of transfer of equity?
This legal process may well involve more than one solicitor as only one solicitor can act for one person. This guarantees all parties involved receive efficient independent advice. But what are the key stages a lawyer will guide you through?
- Reviewing the title deeds. Your property deeds will be analysed by the Land Registry in readiness for the transfer of equity.
- Prepare the transfer deed documents.
- Once your transfer deed is ready, a meeting will be arranged with a solicitor to sign the deed in the presence of a witness.
- Written consent must be provided from any mortgage or secured lenders, banks or building societies.
- Register the deed transfer at the Land Registry. The fee will depend on the property’s value.
What happens when there is a mortgage involved?
When a mortgage is involved, the individual leaving the deed will also be required to be released from the terms and conditions. There are a few different ways in which this can be carried out. However, the chosen method will be determined by the circumstances of your transfer of equity.
- Discharge the mortgage or in other words, pay off the mortgage.
- Where a co-owner buys out a share of the property approval would need to be sought from the lender to transfer the property as part of a buyout.
- Re-mortgage your property to accumulate funds to discharge the mortgage.
Stamp Duty tax implications for transfer of equity
Stamp duty can be charged if you want to transfer the property into joint names. This usually occurs when the house is subject to a mortgage. If you decide to add a name to your title deed, it is a good idea to put a Deed of Trust in place to set out the ownership of the property.
If you are looking for further advice and assistance, then Bond Adams LLP can advise and empower you to understand your options. We will support your decisions about the future. Our lawyers have extensive training to fully support you. Their goal is to provide you with the best outcome you can possibly have.
Contact us
Bond Adams Solicitors
Richmond House
94 London Road
LEICESTER
LE2 0QS
0116 285 8080
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