Skip to content

Transferring Ownership: How Transfer of Equity Works When Buying Property

Buying a house is one of the most significant financial decisions a person can make. For many, it is the largest purchase they will ever make. When buying with someone else, whether a spouse, partner, family member or friend, it is crucial to understand how ownership of the property will be structured. Transfer of equity is one method of structuring co-ownership of a property. This article will provide an overview of transfer of equity, considerations when using it, and why engaging a transfer of equity conveyancing solicitor is important.

What is Transfer of Equity?

A transfer of equity occurs when an owner of a property transfers all or part of the ownership interest to another person. For example, a husband and wife may jointly purchase a home. A few years later, they divorce and the wife would like her name removed from the property’s title. She can execute a transfer of equity to transfer her interest to her ex-husband. He then becomes the sole owner.

Transfer of equity most commonly happens between spouses or partners, such as when a cohabiting couple purchases together then separates. It may also occur between family members, like parents helping children buy their first home. Transfer of equity changes the legal ownership of the property. The land registry must be notified of the change in ownership.

Why Use Transfer of Equity?

There are several reasons a transfer of equity may be preferable to other options:

To remove an ex-spouse or partner from the property title after separation or divorce. This allows one party to remain in the home with sole ownership.
When parents assist children with a housing purchase, they may initially be co-owners, then transfer their equity to the children.
If new partners or spouses move in together, a transfer of equity can add them to the title.
Transfer of equity may allow some tax advantages in certain situations.

In some cases, transfer of equity enables parties to change ownership interests in a property without needing to refinance the mortgage. This can be significantly faster and easier than arranging new financing. Engaging a transfer of equity conveyancing solicitor ensures the process goes smoothly.

What Does the Transfer of Equity Process Involve?

While the concept is simple, the process involves legal formalities. The basic steps are:

The current owner(s) and new owner(s) agree to the transfer of equity. A transfer deed is drawn up detailing the portion of interest being transferred.
A transfer of equity conveyancing solicitor handles the legal work and registration. The Land Registry must be notified of the change in legal ownership.
The lender is notified. They need to give consent for the transfer, although this is usually straightforward. The original mortgage documentation or loan terms remain unchanged.
Any necessary stamp duty taxes on the transfer must be paid.
The transfer deed is formally completed and registered.

Why Involve a Transfer of Equity Conveyancing Solicitor?

Even though a transfer of equity seems simple on the surface, the legal work should be handled by professionals. Here’s why you need a transfer of equity conveyancing solicitor:

They ensure the transfer deed and Land Registry registration are properly completed and legally binding. Mistakes could cause major problems later.
They handle notifications and consents required from the mortgage lender. The lender must agree to the change of ownership.
They deal with payment of stamp duty taxes on the transfer, if any are required.
They confirm there are no other outstanding legal issues, like disputes between partners, that could impede the transfer.
A transfer of equity conveyancing solicitor provides impartial legal advice and guidance to all parties involved. They ensure everyone’s interests are fairly handled.

In summary, engaging a skilled transfer of equity conveyancing solicitor is crucial to ensure the ownership change proceeds smoothly and legally. They handle all complexities and see the process through correctly. Attempting a transfer of equity without professional legal help risks problems down the road. Protect your interests with an experienced transfer of equity conveyancing solicitor.