A transfer of equity is the legal process of adding or removing a person from the title deeds of a property. At least one of the original owners remains on the legal title after the transfer is complete.
In most cases, a transfer of equity will involve a partner being added to the property or one being removed after a separation. However, in recent years, parents are now looking to transfer the equity of their property over to their children as part of inheritance tax planning.
How does the process work?
The transfer of equity process can be straightforward presuming that all the terms and conditions are clear between the people involved in the transfer. If for example, a couple is getting divorced and one person is leaving the home, with the other buying them out and there is no mortgage involved, the transfer of equity is very simple.
To start the process, you need an official copy of the property title deeds from the Land Registry and this will be used to check whether there are mortgages or other restrictions preventing further action. Your solicitor will the prepare the transfer of equity deeds for all parties to sign.
If there is a mortgage on the property, the provider will be notified and must give their written consent for the transfer to be able to proceed. If the mortgage lender does not agree to the transfer, you will need to repay the mortgage before you can go ahead with the transfer. This can be done via a cash payment or by re-mortgaging with a new provider who agrees with the terms of the transfer.
The last step in the process involves registering the deed of transfer at the Land Registry.
How long does a transfer of equity take?
Every transaction is different, however on average straightforward transaction take about 4-6 weeks to complete. If you have a mortgage then the process can often take longer than this.
Do I need a solicitor to arrange the transfer of equity?
At Garratts, we understand the importance of resolving property matters as quickly as possible, particularly in the case of equity transfers and family matters.
Our expert property solicitors will always endeavour to complete your transaction as quickly as possible. With a full service available via post, phone and email, you can take care of everything when it’s convenient for you.