Transfer of Equity
We are often asked to "change the name on the deeds". This is known as a transfer of equity and occurs when one party remains on the title both before and after the transfer. There are many reasons why you may wish to add or remove a name from the deeds, such as upon marriage to add a new spouse to a property owned by you or upon divorce/separation to remove one of the existing owners. A parent may wish to add a son or daughter or a partnership may change and the property ownership may need to be updated accordingly. We will carry out this process for you and ensure that the transfer is registered at the Land Registry to ensure that ownership details are up to date.
Stamp Duty Land Tax (SDLT)
If the transfer of equity is being carried out as the result of a divorce or separation, the transfer is usually exempt from SDLT. However, in many other cases, even if no money is changing hands (for example, when the new owner is taking on the existing mortgage) SDLT may be payable. Once we know your specific circumstances, we will ensure that you are properly advised on the SDLT implications of the transfer.
If the property is mortgaged and you wish to add or remove someone from the deeds and retain the existing mortgage, you will need the consent of your lender. Alternatively, you may wish to pay off this mortgage and take out a new mortgage (remortgage) with a different lender simultaneously with the transfer of equity. In either case, we will liaise with the lender(s) to ensure that their security is protected and carry out the necessary legal work on your behalf.
Upon the transfer of a leasehold property there may be additional requirements imposed in the lease. At the very least, notice will need to be served upon the landlord and/or managing agents and a fee paid to them. This is an additional cost that you will have to bear in mind. We will check the lease and ensure that you comply with the requirements imposed by your landlord
Declaration of Trust
We would highly recommend, when adding someone to the title of a property that you own, that a written agreement is drawn up setting out what would happen to the outgoing person's share and how this should be calculated, should one of you die or should the relationship break down. This is known as a declaration of trust and will ensure that your intentions are clear, in so far as the property is concerned, when waters may be muddied in the future. Our Trusts and Estates Team are experts in this area and can help protect your investment, click here to visit Trust and Estates.