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A transfer of equity is where at least one owner of the property remains on the title deeds but another person or persons are either added or removed from the title deeds.
A transfer of equity can be used in many situations. For example, a property owner may wish to add their partner or adult child to the title deeds. Conversely, a couple may separate and one of the owners may be removed from the title deeds.
This all depends on if a person is being added or removed from the title deeds. In any event, if the property is mortgaged, the consent of the lender is required. The first step should be to contact the mortgage lender.
Once the mortgage lender has provided their consent to proceed with the transfer, we will draft the transfer deed. This is the document that will be signed by the existing or new property owners. It will be sent to the Land Registry upon completion of the transfer.
In some cases, clients may prefer to redeem their existing mortgage on the property and take out a new mortgage on the property with a different lender. In this case, the matter becomes a re-mortgage and a transfer of equity.
If a new mortgage is being taken out, we will also report to you on the new mortgage offer. We will then arrange for you to sign the new mortgage deed.
In situations where a person is being added to the title deeds, we will also report to the new owner regarding the title to the property so they are aware of any rights the property benefits from or any covenants imposed on the property.
If Stamp Duty Land Tax is also payable then we will draft the necessary form and submit this to HMRC on your behalf.
Stamp Duty Land Tax is not always payable, it depends on the consideration monies. This is not just the money that is changing hands but if there is a continuing charge, then the existing debt will also form part of the consideration.
It is important to note that there are some cases where Stamp Duty Land Tax will not be payable. This is the case if the transfer has taken place by virtue of a court order, such as a consent order in the case of a divorce or if the transfer takes places in contemplation of separation.
We would always recommend that you obtain independent legal advice before signing a transfer deed. This is the case even if it has been sent to you by a third party solicitor. Not only can we ensure the transfer deed has been correctly drafted but we can ensure that you are released from any mortgage debt where applicable.
If you need legal advice regarding a transfer of equity, call our Residential Conveyancing team on 01270 625478. Alternatively you can visit our Residential Conveyancing services page here or complete this form for a call back.
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