Transfer of Equity Guide

1. Receive Instructions:

We receive details of the Transfer of Equity and confirm your instructions to proceed.
Your title deeds are requested from your existing lender.
We obtain the up-to-date position on your property from Land Registry.
A redemption figure is obtained from your existing lender.
We receive a copy of your mortgage offer.
You complete and return forms regarding the Transfer of Equity of the property.

2. Set for Completion

Once the documents are received, the legally required searches are carried out and funds
requested from your new lender. A Completion Date is provisionally agreed with your new lender.

3. Completion Day

We received funds from your new lender.
We redeem your existing lending.
Our fees are paid and the balance of funds are sent to the client.

4. Registration

Once the case has completed, the case is passed to our registration team who will register the interest of
your new lender with Land Registry

Other Transfer of Equity and Equity transfer information:

Home owners might choose to amend the legal ownership of their property for many reasons. This is also referred to as a transfer of equity. We have listed some of these reasons below as a guide for you;

• Marriage - When two people get married, if they own two houses, they often decide on one matrimonial home and therefore it makes sense to transfer the matrimonial home into joint names. This is referred to as a Transfer of Equity. Usually the person being added to the property deeds will not pay full price for their share in the property as such the law see this transfer of deeds or transfer of equity as a gift. This is also sometimes referred to as a transaction at an under value.

• Divorce and separation - After a divorce the divorcees may have to transfer a jointly owned property back so that only one of them legally owns the property. This is also called a Transfer of Equity and might also be seen by law as a gift. There are however other circumstances such as if a court order has been instructed, where the law will not see this transfer of equity as a gift. Also if full price has been paid for the property share the law will not see this transfer of equity as a gift either.

• Tax – Accountants will often advise property owners to make a transfer of equity to their children or other
family members. This financial sharing of the home can be more tax efficient and it is also referred to as a
transfer of equity and might also be seen in law as a gift.

• Amending and, or transferring the financial status of shares in a property - Some home owners buy a property in joint names but they do not want to legally own the property on an equal share basis.
In situations like this a trust deed can be set up to explain exactly what percentage share each person owns.
A trust deed is registered at the land registry. If the home owners decided change the percentages of their
shares in the home at a later date then a Transfer of Equity would be carried out along with this change in the trust deed details.

Even though a transfer of equity may be seen on the surface as a simple process people can forget that it is a legal one. Legally a transfer of equity can be complex and you should always get professional legal advice from
a qualified solicitor. Click here to get a transfer of equity quote from a professional solicitor today!

What will a solicitor do when changing a property from a sole name into joint or
multiple names?

When changing a property from a sole name into joint or multiple names or simply adding more names to the deeds of a property this is the process a solicitor may follow

Review the title deeds or a copy of the property deeds from the Land Registry to prepare for
an equity transfer.
Prepair the transfer deed and then meet with the parties and sign the transfer deed in the presence of a witness.
Notify any additional parties like mortgage lenders or secured lenders, banks or building societies; any third party like this must give
their written consent to the deed transfer.
Find out if stamp duty is payable. If so the Stamp Duty Land Tax Form must be signed by all property owners and sent to the HM Revenue & Customs.
Register the deed transfer at the Land Registry. A Land Registry fee is payable.
Identity of the clients need to be checked, as it is a legal requirement.

Removing names from your property deeds

The same basic legal process as mentioned above is followed. If names need to be removed from your property deeds this may be as a result of an unsettled dispute. In cases like these one solicitor may not be able to act
for all the parties involved because there will most likely be a conflict of interest. Each person must find a solicitor independently so that independent advice can be given.

Keeping an existing mortgage and transferring your property

If your property is mortgaged and you want to keep the same mortgage provider and mortgage product you must have written permission for the transfer from mortgage provider. You might be asked to meet with your mortgage provider or write to them explaining the reasons for your property transfer; this is especially likely when you are requesting that names be removed from your property deeds.

If your mortgage lender approves the equity transfer they will send a written acceptance to you directly and also your solicitor. If your mortgage lender issues certain terms and conditions that must be met in order for the equity transfer to be accepted your solicitor will oversee these terms and ensure you adhere to them.

If a name is to be removed from your property deeds your mortgage lender will want substantial proof that as the remaining owner you can still afford to repay the mortgage. If your mortgage lender is not fully satisfied with this proof the can refuse to remove the name(s) from your property deeds, which means this person is still liable for mortgage payments on your property.

If a new name is being added your property deeds then your mortgage lender will ask that they sign the mortgage deed to confirm they accept liability for the mortgage payments. Your mortgage lender will also carry our credit checks at this point. Transfers of Equity and remortgages

If you are remortgaging your property and transferring equity at the same time you will not require permission from your mortgage lender. This is because your old mortgage will be paid off and the two new legal documents will start at the same time. Your new mortgage lender will need signatures from all the named people on your property deeds.

Transferring your property where little or no money is changing hands

When a property or a share in a property is transferred for very little or no money it is called a transaction at an under value. This situation occurs usually when people get married and they have two properties between them. It essentially means that the property is being transferred for less than it would be worth if it was sold.

There are lots of reasons as to why people transfer property for less than its market value or for free. These reasons are often personal ones like marriage or a gift to family members. They may also be commercial reasons like transferring a property from one company to another. Some property owners may look to transfer a property to another person in order to avoid loosing the property because of debt related problems like bankruptcy.

If a property is transferred for less than current market value, by law it is deemed as a gift from the property owner to the person receiving the share in the property. However when trying to avoid loosing a property from bankruptcy proceedings by transferring deeds the law can undo property transfers made within 3 years of anyone on the deeds being removed or transfers being made. This allows the law to defeat debtors trying to protect their property
from debtors.

Insolvency laws now allow the property to be sold and the proceeds from a sale are used to pay off any debtors.
Usually a Declaration of Solvency will be signed by property owners because their mortgage lender will insist on it when transferring a property or a share in a property for less than its market value or for free. The lender may also require the property owner to take out insurance to protect the mortgage repayments. Your solicitor will be able to draw up a Declaration of Solvency.

Transfers of property at market value

When a share in property is transferred for full market value your solicitor will prepare a transfer deed which shows the price paid for that share. Your mortgage lender may ask for evidence that the full market price has been paid. Mortgage lenders often require a written valuation from a surveyor or an estate agent.

Transfer of Equity Stamp Duty

The HM Revenue & Customs require a Stamp Duty Land Tax form to be completed and signed by the property owner. For further details see our stamp duty page.