Do Both Parties Need a Solicitor for Transfer of Equity?

A common question when transferring equity on a property is whether both parties need their own solicitor. The short answer is that it's not strictly necessary, but it's highly recommended.

If no money is changing hands in the transfer, both parties won't necessarily need a solicitor but it's strongly advisable for the party leaving the title to seek independent legal advice. Our fees for this start at £300.

If money is exchanged, separate legal representation will be required for the party remaining on the title and another for the party leaving. This is because the money will need to be passed through the solicitor.

Do you need two solicitors for a transfer of equity?

There are two parties in a transfer of equity: the transferor (person transferring the equity) and the transferee (the person or people getting the transfer). While not required, having two solicitors in a transfer of equity is generally advisable. Here's why:

• A solicitor's primary duty is to their client. When acting for both parties, there's a potential for a conflict of interest, as the solicitor's advice to one party might not be in the best interest of the other.
• Having separate solicitors ensures that both parties' interests are fully protected. Each solicitor will independently review the transaction and provide impartial legal advice.
• If a conflict arises, the solicitor could be held liable for any damages suffered by either party.

You can avoid having two solicitors if the parties have agreed via a Court Order or if the leaving party doesn't want any payment for their equity; they just want their name off the legal title.

What do the solicitors do?

Can a solicitor act for both parties in a transfer of equity?

In some specific circumstances, a solicitor might be able to act for both parties. However, this is only possible if:

• Both parties are fully aware of the potential risks and conflicts of interest.
• Both parties have given their informed consent in writing to the solicitor acting for both of them.
• There is no actual or potential conflict of interest between the parties.

It's crucial to note that even if a solicitor can technically act for both parties, it's still generally recommended to have separate legal representation. This ensures that both parties' interests are fully protected and that the transaction is carried out smoothly and legally.

Why do you need a solicitor for a transfer of equity?

If you're considering a transfer of equity, you should consult with a solicitor to discuss your circumstances and help determine the best course of action.

Protecting your interests

• A solicitor will conduct thorough checks on the property, ensuring there are no hidden issues like outstanding debts, charges, or legal disputes.
• They will scrutinise the transfer of equity documents, ensuring they are fair and protect your interests.
• In case of disputes, your solicitor can negotiate on your behalf to reach a favourable agreement.
• If the transfer is executed properly, the leaving party cannot come back and ask for more money./li>

Tax implications

• Your solicitor can help calculate and submit forms for SDLT (Stamp Duty Land Tax), a tax payable on property transactions.
• They can advise on potential CGT (Capital Gains Tax) implications, especially if you're making a profit on the sale of your share.

Legal compliance

• Your solicitor will ensure that the transfer complies with all relevant laws and regulations.
• They will handle the necessary paperwork to update the Land Registry, securing your new ownership status.

Dispute resolution

• If disagreements arise, your solicitor can represent you in mediation or litigation proceedings.

How much does a transfer of equity cost?

SAM's fees start at:

Transfer of equity fees vary depending on:

SAM's fees start at £399 INC VAT for the solicitor legal work in a transfer of equity. This includes checking the legal documents, title deeds, restrictions on the title, and drafting the TR1 form.

They will also handle completion, submit any necessary stamp duty forms, and register the property with the new owners' names at the Land Registry.

There might be additional legal work if:

More on these costs, their details, and the situations where they apply in our transfer of equity cost article.