Transfer of Equity
Are you currently asking the question, how can I remove this person from my title deeds or how can I add this person to my title deeds?
If so, then a Transfer of Equity may be what you are looking for.
A Transfer of Equity is the process by which a party is either added or removed from the property title deeds, leaving at least one of the original owners in place.
If no original owner is remaining on the title deeds, then this would be a sale or a purchase rather than a Transfer of Equity, even if no money changes hands.
Our Private Client Department are often called upon to add people to the title on marriage, moving in together or for tax planning reasons. We are also often asked to remove names from title documents where there is a relationship breakdown or a death of the owner.
Even though there may be agreement as to what needs to happen to the property, it is often difficult to know how to put this into practice.
This is where Attwells are able to assist. A Transfer of Equity is often much simpler than a sale or purchase and often does not require any searches or enquiries.
Transfer of Equities in Colchester, Ipswich & London
Q) What is the process to change the name on a property deed?
1) Title documents are downloaded from the Land Registry.
What are we looking for?
- Is there a mortgage?
- Who are the current registered owners?
- If more than one person, how do they own the property?
- Re there any other restrictions that would prevent the names to be changed?
All parties to the deed need to sign it.
If anyone is not represented by a solicitor or conveyancer they will need to complete a form to verify their identity.
3) If you own a leasehold property, we most likely will need to contact the freeholder to see what their requirements are for the change of ownership and, if there is to be a change of mortgage lender, to check that insurance is in place and any ground rent and service charges payable are paid up to date.
4) If there is a mortgage on the title, we will either need the lender to consent to the transfer or you will need to get a new mortgage offer in the names of the new owners and we will need this in order to complete the change of names.
If there is no mortgage on the title, we can date the deed (this will be the date that the ownership of the property changes) and get this registered for you with Land Registry.
Q) Transferring my Property Deeds When I have a Mortgage
This all depends on what you want to do about the mortgage.
- Do you want to repay it in full and have no further mortgage obligations?
- Do you want to keep the existing mortgage and just have someone removed from the mortgage or added to it?
- Do you want to take out a new mortgage in the new owners names?
If you just want to repay the existing mortgage, we will need to have the details of you existing mortgage account with your lender so we can arrange for the mortgage to be paid off as part of the transfer.
If someone is being removed from the title, the lender will need to satisfy themselves that those remaining on the title documents can afford the mortgage repayments.
If someone is being added to the title, they will need to assume an equal responsibility to the mortgage as those already on the title (those that already own the property). The lender is likely to want to ascertain whether the incoming person can equally afford the mortgage repayments – just like if they were obtaining a new mortgage.
In both instances, the lender would need to provide their consent in writing to the addition or removal of someone from the ownership of the property. The consent can be either the lender’s signature on the transfer deed, or a letter confirming their consent. This will depend on the specific lender.
If the current mortgage is being paid off and you are taking a new mortgage, this is known as a re-mortgage.
This is essentially a second element to the transaction.
We will need to report to the new owners on the new mortgage that is being taken out and you will all need to sign new mortgage documents. These will need to be returned before the new mortgage funds can be ordered and the change in name can take place.
Q) Will I have to pay Stamp Duty Land Tax (SDLT) on transferring my property deeds?
Much the same as when a property is purchased from the previous owner, when you transfer your property deed, SDLT needs to be considered.
We need to look at what the “consideration” for the transfer is. The consideration is anything of monetary value that is provided to the owner of the property to effect that transfer. For example, this may be cash, the repayment of the mortgage, credit cards etc.
SDLT is calculated on the total consideration for the transfer.
We then have to work out if the standard SDLT rates apply or if the 3% surcharge may apply. This will depend on whether the person or people staying on the title to the property own any other property.
If the consideration for the transfer is over £40,000 but no SDLT is payable, HMRC still need to be notified of the transaction. This is something Attwells would take care of for you.
To give you an idea of how this works, we have set out an example below;
Ms A and Mr B have lived together for 15 years although they are not married or in a civil partnership. They are separating and wish to deal with the division of their home. The property has been valued at £300,000 and they have an outstanding mortgage of £50,000 over the property.
Ms A has decided to stay in the property and buy Mr B out of the property.
The equity in the property (the value less the outstanding debt) is £250,000 therefore Ms A will pay Mr B half of this being £125,000.
Ms A will be getting the consent of the existing lender to remove Mr B from his obligations under the mortgage and therefore she will take over Mr B’s half of the outstanding Mortgage being £25,000.
The consideration Ms A is paying is therefore the cash that is changing hands (£125,000) plus half of the existing mortgage debt (£25,000) totalling £150,000
The transfer of title is completed on the 30th June 2019 and based on the rates for SDT that applied on that date, Ms A will be liable for SDLT of £500. This assumes that she does not own any other property and is not subject to higher rates of SDLT.
Q) How much will it cost me to change the names on my property deeds?
Our legal fee depends on whether you have an existing mortgage or not and if the property is leasehold or freehold.
The costs are as follows:
Our Legal Fees
No mortgage or repaying existing mortgage
£450 + VAT
Lender’s consent required to change of name
£550 + VAT
New mortgage being obtained
£650 + VAT
Leasehold properties (additional fee)*
£250 + VAT
There are some additional fees as follows:
Complete and file the SDLT return
£75 + VAT
If consideration under £40,000 this is not needed - see our article: Will I have to pay Stamp Duty Land Tax (SDLT) on transferring my property deeds? To see if this will apply to you
Electronic Funds Transfer Deed
£40 + VAT for each transfer needed
Electronic ID check fee
£10 + VAT for each person
In addition to legal fees, there will be some third party costs as follows:
dependent on consideration
Please see: Will I have to pay Stamp Duty Land Tax (SDLT) on transferring my property deeds? To see how this may apply to you
Land registry Fee
This is also dependent on the consideration and/or the value of the property.
£10 – but dependent on the specific property
*To deal with the requirements of the landlord for the change of name and (where applicable) the change of mortgage. The landlord may in addition have fees that they charge for their time in dealing with the request.
What is included in the price?
- Drawing a Transfer Deed to transfer the ownership of the property
- Obtaining relevant signatories
- Registration of the transfer with Land Registry
- Dealing with your lender’s consent to the transfer (where applicable)
- Dealing with your re-mortgage (where applicable)
- Dealing with your landlord’s requirements for the transfer (where applicable)
What is not included?
- Tax advice
- Anything not listed as included above