What is a transfer of equity, and do you need a solicitor?
The conveyancing process for transferring equity in England and Wales involves the legal transfer of ownership or shares in a property from one party to another. This is typically done when individuals want to change the ownership structure of a property, such as adding or removing someone from the property's title. It is often used in scenarios such as when a couple is divorcing, or when family members want to share or transfer ownership of a property.
Whilst it is possible to carry out a transfer of equity without a solicitor, it is a complex legal process, and any mistakes can lead to significant complications when registering the transfer of ownership at Land Registry or further down the line. Therefore, it's usually advisable to seek professional legal guidance when transferring equity in a property.
What is the process for transferring equity in a property?
This process can be relatively straightforward if there are no complications, but it's important to follow the appropriate legal procedures. Here is a general overview of the process your solicitor/conveyancer will take to add or remove a person from the title deeds:
1. Agree on the ownership structure or consideration of the transfer
This will need to be agreed between parties before you instruct your solicitor/conveyancer. Your Solicitors/Conveyancer will then have a discussion with you to take your instructions. If this becomes disputed at any point during the transfer of equity, the transaction will be delayed.
2. Consent from the mortgage lender or new mortgage offer
If there's an existing mortgage on the property, you will need to obtain consent from the mortgage lender for the transfer. Your solicitor/conveyancer will liaise with the lender to obtain the relevant consent documents and deal with any other mortgage related issues.
3. Searches and checks
Your solicitor/conveyancer will obtain and review copies of the title deeds to ensure there are no legal issues or restriction noted on the deeds that could affect the transfer. Should there be any restriction entries within the deeds, your solicitor/conveyancer will contact the relevant parties or draft the relevant legal paperwork to comply with those restrictions.
4. If leasehold or shared ownership property, consent from the freeholder and/or management company
Your solicitor/conveyancer will liaise and assist with any requirements stipulated by the freeholder/management company. Such requirements can make the transaction more complex, however your solicitor/conveyancer will know how to comply with any regulations noted within the lease and prepare documents, such as the notice of assignment and deed of covenant to comply with the requirements.
5. Draft the transfer deed and any other relevant legal documents
Your solicitor/conveyancer will prepare the transfer deed. This document outlines the change in ownership and how the property will be held. Your solicitor/conveyancer will draft the deed to comply with the law and will include any legal provisions necessary to protect your future interest.
6. Execution of legal documents
The transfer deed and any other documents, will be sent to you and your partner (or their legal representative) for execution.
7. Completion and transfer of monetary consideration/redemption of existing charges
Your solicitor/conveyancer, having taken your authority, will complete the transfer by dating the documents and deal with any financial considerations as agreed in the transfer deed.
8. Stamp Duty Land Tax (SDLT)
Depending on the property's value and the circumstances of the equity transfer, your solicitor/conveyancer may need to submit a Stamp Duty Land Tax return and there may be stamp duty to pay. There are several exemptions and reliefs that may apply.
9. Registration with Land Registry
Your solicitor/conveyancer will lodge an application to update the property register, using the executed transfer deed and the relevant consents. Once registered, you will be provided with a copy of the updated register.
Remember that the specific process and requirements may vary depending on your individual circumstances and the type of property involved, so consulting a solicitor/conveyancer is essential for personalised guidance. Call our specialist conveyancing team today on 0161 696 6187.
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