Transfer of Equity Solicitor

Transferring property ownership legally is known as a transfer of equity. To ensure everything is done correctly and to protect your interests, it's highly recommended to seek expert legal advice.

Whether you're going through a life change or simply need to adjust your property ownership, our conveyancing team at SAM is here to guide you through the equity transfer process. We'll work efficiently to minimise any stress or hassle. We've helped clients with a variety of situations, including:

• Relationship changes (e.g., divorce).
• Court-ordered transfers.
• Property gifting.
• Family transfers.
• Trust formation.

Transferring the equity in your property is where the existing legal owner/s are removing or adding a name to the legal title. When a party leaves, it is known as buying someone out of a jointly owned property.

The timescale to complete transferring equity is anywhere from 3 to 6 weeks, however, it can be slowed if:

• You struggle to get lender consent to the change of legal ownership.
• There is a dispute over the amount the departing party is due.
• (If leasehold) you haven't paid your service charges/ground rent or the freehold managing agent is slow or absent.

After you complete it can take several months for the Land Registry to update the legal title. You need to file and pay for any tax due on the transfer.

The transfer of equity process

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Transfer of Equity Costs

• Solicitors fees including ID checks, office copies.
• Land Registration fees.
• (if party being removed) ID1 Form verification fee.
• (if mortgage) Change of mortgage fee.
• (if leasehold) Notice fee to freeholder.

On average, a quote will cost in the region of £450 to £1,000 depending on which solicitor you choose to instruct - if the property is leasehold and if there is a mortgage.

Our fees for a transfer of equity start from £399 INC VAT.

If both parties instruct a solicitor, these fees may increase. However, get in touch with us to see how we can help you whether you're adding or removing a party from the title.

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How does a transfer of equity work?

• 1

  Instruct a Solicitor

The party/parties remaining on the legal title instruct a solicitor to act on their behalf.

For the party leaving the property, they will need to complete an ID1 Form and have this witnessed. The witnesses can only be a solicitor, licensed conveyancer, notary public, barrister, CILEx Conveyancing Practitioner, Chartered Legal Executive Conveyancing Practitioner, Chartered Legal Executive, a lawyer outside the UK, an officer of the UK armed forces operating overseas, or an employee at a Land Registry Office.

If you are paying consideration to the leaving owner, then your solicitor will need to confirm the source of the funds you are using.

• 2

  Mortgage lender consent or new mortgage offer

If you have an existing mortgage, you cannot remove the name of a legal owner from the property and mortgage without the lender's consent.

If you are remortgaging, your mortgage lender issues their mortgage offer to your solicitor in the name of the new owners. Different mortgage lenders will have different requirements for their solicitors to adhere to.

Some won't ask the solicitor to do anything more than their obligations under the CML, and some mortgage lenders request additional information to be provided before they agree for the mortgage to be issued.

For example, Paragon Mortgages require the solicitor to provide copies of planning permission, building regulations and rights of way, however Santander Plc doesn't require this.

• 3

  Completion and payment

The solicitor sends you a financial statement before completion detailing the legal fees and disbursements. This is an example of a costs statement for a transfer with an existing mortgage of £200,000 and £50,000 consideration:

Stamp Duty Calculator

Once your mortgage advance is received by your solicitor and your solicitor is ready to complete, they will redeem your existing mortgage, pay the consideration to the leaving owner, and then settle their invoice and any disbursements (online ID check, official copy costs and OS1/bankruptcy). The balance, if any, is then repaid to you. The only amounts left will relate to the Land Registry fees and any costs due to the property being a leasehold.

• 4

  Post-completion

After completion, the process for discharging the old mortgage and registering the new mortgage/owners at the Land Registry can take between 1 to 6 months after completion.

The time delay is linked to the Land Registry having a backlog of work. This can be extended further for leasehold properties if the freeholder/managing agent delays in releasing the notice.

Delays can be worsened if your service charge and/or ground rent are in arrears so make sure that you have settled these before remortgaging. Otherwise, you may have a stand-off with your freeholder not releasing your notice until your service charge account is settled.

DIY Transfer of Equity: What are the risks?

While it might seem tempting to handle this process yourself to save costs, it's crucial to understand the importance of seeking professional legal advice and instructing a solicitor to do the transfer for you.

Legal accuracy

The legal documents in a Transfer of Equity must be completed accurately. Doing these yourself with errors could cause delays, complications, and even invalidate the transfer. A solicitor will ensure all necessary paperwork is completed accurately and on time.

Tax implications

Depending on the circumstances, there might be tax payable such as Stamp Duty Land Tax (SDLT). A solicitor will help you comply with all tax obligations and submit the required forms on your behalf. Doing it yourself could mean facing underpayment penalties or late filing fees.

Updating the Land Registry

A Transfer of Equity usually involves changing the property's rights and ownership structure. Your solicitor will ensure the Land Registry is correctly updated and that you fully understand the impact of the transfer.

Doing this yourself could lead to ownership disputes, complications with future sales due to incorrect descriptions, or a reduction in the property's value.

Handling disputes

In some cases, disputes or disagreements arise. Without a solicitor, you could be at a disadvantage in negotiations and legal proceedings. If you instruct a solicitor, they can provide legal representation and help resolve the issue.

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