After you have purchased a property, a time may come where you want to alter who is named on the title deeds. This may be adding someone on, taking someone off, or adjusting the percentage of the property that each person owns. This process of changing names is called a ‘Transfer of Equity’.
There are several steps involved in a Transfer of Equity. If there is a mortgage on your property, then you will first need to speak to your mortgage lender and get their consent for the Transfer. They will speak to you about your financial circumstances and then issue you with a Letter of Consent (if you are keeping your existing mortgage) or a Mortgage Offer (if you are taking out a new mortgage). Remember that the same people named on the property also need to be named on the mortgage, so take this into account when planning your transfer.
If you wish to add someone on to the deeds, then a single solicitor can take care of the whole process for you both from start to finish.
If someone is to be removed from the property however, then it is important to keep in mind that they will require their own, separate legal representation at a different firm of Solicitors.
Once you have got consent from your lender and have instructed a Solicitor, the process can begin:
1) Locate the Title Deeds and Contact the Land Registry
We will first need to obtain the Title Deeds for your property. If you don’t have these yourself, it is common for deeds to be held by your Mortgage Lender, or the Solicitors who acted for you when you first purchased your property. We will contact whoever holds these and request that they be sent to us for review.
We will also contact the Government Land Registry in order to get up-to-date records of the people currently named on the deeds, and what shares of the property they own.
2) Speak to your Mortgage Lender
We will need to speak to your mortgage lender in order to obtain their consent for the transfer. We will also ask them for a redemption figure for your current mortgage. Many lenders are happy for the transfer to take place with an insurance policy in lieu of a full set of property searches, however some do require new searches to be undertaken. We will speak to them to clarify their position at this stage, and advise you accordingly.
3) Prepare the Transfer Documentation
We will now prepare all the various pieces of legal documentation for both the transfer and the mortgage. Once the documentation is ready, we will arrange an appointment for you to attend the office to go over the paperwork with the solicitor and sign everything. If a party is being removed from the deeds, this is the point where we will contact their solicitor and send them the relevant paperwork for their side of the transfer.
4) Deal with Monies
Once we have signed paperwork from everyone involved in the Transfer, we can then contact your Mortgage Lender to secure the revised mortgage, under the new names. If you have taken out a new mortgage, we will draw the funds to pay off the previous mortgage and then pass any additional funds over to you.
If any money is to be paid to any individuals as part of the transfer (if a person is being ‘bought out’ of the property, for example), we will also arrange for these funds to be sent to them.
5) Finalise with the Land Registry
With the paperwork signed and the mortgage in place, we will contact the Land Registry to update their records with the names of everyone on the deeds and details of the mortgage. Once the registration is confirmed, the Transfer of Equity is complete, and the legal owners of the property have officially been updated.
If you have any queries regarding a Transfer of Equity our team are here to help. We have offices in Chesterfield, Dronfield, Mansfield, Nottingham and Sheffield, although the majority of the work can be done via the phone and email for your convenience.
An investor has pulled out causing our chain to collapse, what can we do?
The current market and national economy is so uncertain that people may choose to wait and indeed remove their risk by pulling out of the transaction. Although there is no reason not to carry on as normal in terms of the legal process we have to consider slower transaction times or hesitant investors or buyers.
At what point in the process is it legally binding?
You can withdraw from a sale or purchase up until the point contracts have been exchanged. Any deposits paid after exchange of contract will then by non-refundable. After contracts are exchanged you are then responsible for the property you are buying and should arrange suitable insurance from this date.
How long are local searches valid for?
A local authority search completed for a house purchase is valid for 3 months.
How long does the conveyancing process take on average?
We usually say 8-12 weeks for an average sale or purchase. Queries and concerns can often come out of the local authority searches which need further investigation and sometimes this leads to re-approval from the Mortgage lender. This can add further time into the process.
What happens if the house I am buying has quarantined owners in it?
Unfortunately, in this situation the seller will not be able to give vacant possession, which will lead to completion delays. As a preventative measure, as per question 1, we can offer to exchange contracts and complete on the same day, which ensures that contracts are only exchanged if all parties in the chain are able to move on that day, thus reducing the risk to all parties. This can be more stressful so we ask that clients be sensible and accommodating of the situation.
What happens if there are disruption to banking services due to coronavirus?
If banks or mortgage lenders are unable to move funds around due to staffing shortages then this will disrupt your completion, however, be reassured that they will be doing everything they can to prevent this scenario.
What happens if we are in a national lockdown and we have exchanged to move?
Unfortunately, in this situation the seller will not be able to give vacant possession, which will lead to completion delays and penalties. If this situation arises, we ask that clients be sensible and accommodating of the unprecedented situation. If contracts have been exchanged then usually it would result in interest and compensation being paid to you, however if you are in a chain the same will apply to your buyers, so to keep the chain going it may be better just to accept the delay. As a preventative measure, we can offer to exchange and completion on the same day which ensure that contracts are only exchanged if all parties in the chain are able to move on that day.
Under normal circumstances, we would not recommend simultaneous exchange and completion as it does have its risks, since there is no guarantee, until the day itself that you will actually be moving. This means that if you are paying deposits to removal companies or arranging for services to be disconnected when we have no legal assurance that you will move. Please be aware that if you do instruct us to carry out a simultaneous exchange and completion this is done entirely at your own risk and Banner Jones Solicitors cannot be held responsible for any losses that you might incur if the transaction does not complete.
What happens if we can’t produce certificates for work we’ve had done on the house we’re selling?
You can indemnify the work by taking out an insurance policy. This means that you can not be held liable for any future fault on the work that was done. We can arrange this for you
What is Stamp Duty and how much will I have to pay?
Stamp Duty is a tax levied by HM Government on a transfer of property. For residential property this tax is calculated at 1% for property values between £125,001 and £250,000, 3% for values between £250,001 and £500,000 and 4% for those of £500,001 and over. Duty may also be chargeable on any rental charge (leases only) - this affects both residential and commercial leases where different thresholds are applied.
What is the difference between Joint Tenants and Tenants in Common?
Tenants is Common is where two or more people are entitled to the proceeds of sale in distinct shares - on the death of one, his/her interest will not pass to the survivor(s) but will be part of his/her estate. Joint Tenants are on the other hand 50/50 Co-owners of land - when one of them dies, his/her rights of ownership pass to the survivor(s).
Will a surveyor/valuer attend the house I want to purchase or are they not carrying out surveys currently due to coronavirus?
Each company will be following their own policies and procedures as well as the government guidelines, which may result in a slower service or more precautions being put in place, or indeed surveys being cancelled.
Will removal companies be happy to enter properties during the coronavirus measures?
As things stand, it will be down to the individual companies who will have their own policies in place so the best thing is to contact our remover and discuss their policy with them.
Will the search providers be able to carry out searches during the coronavirus measures?
The majority of the searches are automated through computer systems and will therefore not be affected, however, the local authority searches are done by visiting the council offices. Please therefore expect lengthy delays on the return of those searches as some council offices are not allowing visitors.