What is a transfer of equity?
Equity distribution is necessary to finalise the process during a separation, divorce or civil partnership. For the person staying in the property, this is especially important as it helps protect their assets.
Transfer of equity is also often used when a couple marries and moves in together. In each scenario, the transfer of equity legally records who owns a property.
You’ll first need an official copy of the property’s title deed. This will be checked for any outstanding mortgages or restrictions. A conveyancer will review the title deeds, confirm client identities, and prepare the transfer of equity.
Divorce or separation
You may decide to separate and agree that one of you will keep the property. If that happens, you’ll need to hire a transfer of equity solicitor to handle the transfer.
Your ex-partner may be willing to come off the property deeds without requiring payment. In other cases, you may want to arrange an exchange of assets or buy them out. It is still a transfer of equity whether or not money changes hands.
When you’re transferring equity because of divorce or separation, it’s important not to forget your existing lender. You may have agreed who will keep the property, but you’ll still need to speak to your mortgage provider about whether you can afford the mortgage on your own.
Focus on the deeds
When a couple splits up, one person can change the mortgage without removing their ex-partner from the property deeds. This is especially common if the couple were unmarried. They may assume it does not matter if only one person is paying the mortgage, or the partner who left may say they do not want the house.
Getting a transfer of equity completed as soon as possible is important. If both names remain on the deeds, both people still have a stake in the property, even if only one person is paying the mortgage.
Your partner may say they do not want any stake in the property. However, if you decide to sell it in the future, the situation could become more complicated.
How long does a transfer of equity take?
This depends on whether there is a mortgage on the property and whether both parties agree on the terms. Your solicitor will deal with the paperwork, confirm the details, and apply to HM Land Registry to update the deeds.
If a property has no mortgage, the process can be very quick. The parties only need to sign the transfer deed and file it with the Land Registry. If there are complications or disagreements, it will take longer.
Adding a name to the deeds
A transfer of equity is not only about removing a name from the deeds. It can also include adding a name. For example, parents may want to add their children to the deeds of the family home. When someone marries, they may want to add their partner to the deeds of a property they already own.
The transfer of equity process requires a solicitor to prepare the correct paperwork. A solicitor will also be needed to make name changes on the property deeds, whether or not any money changes hands.
Transfer of equity costs
You’ll need to pay your conveyancing fees to transfer equity. You should also consider whether you’ll need to pay Stamp Duty Land Tax (SDLT). This may apply if you’re acquiring part of a property above the tax threshold.
How much do solicitors charge for a transfer of equity?
Transfers of equity can cost up to nearly £6,000. However, the total depends entirely on the circumstances of the transfer. The amount of equity involved and whether there is a mortgage can both affect solicitor fees.
The cost can include solicitor fees, anti-money laundering checks, bank transfer fees, Land Registry fees, and other related expenses.