Do I need a solicitor when transferring equity in a property?
A 'transfer of equity' is when an existing owner of a property adds or removes one or more other people to the ownership (title) of a home or property.
Transferring equity is a legal process which is usually carried out by a conveyancing solicitor.
See also:
Get a transfer of equity conveyancing quote
Why might I want to transfer equity?
There are various reasons why you might decide to transfer equity in your home, including:
- adding a spouse, civil partner or unmarried partner to the title deeds
- removing someone from the title deeds
- gifting a property to a child
- Inheritance Tax (IHT) planning
What will my solicitor do?
A conveyancing solicitor will work closely with you to complete the legal and administrative work for your transfer of equity.
Your solicitor will:
- obtain and review the property's title documents from HM Land Registry (HMLR)
- draft the various legal documents for the transfer
- arrange for the transfer deed and mortgage deed (if applicable) to be signed and witnessed
- distribute any funds to the relevant parties
- register new owner/s interests at HM Land Registry (HMLR)
- complete and file the Stamp Duty Land Tax return at HMRC
Instructing a conveyancing solicitor to carry out the conveyancing process ensures that you are legally protected and ensures that the legal transfer is completed correctly.
Transfer of equity conveyancing is inexpensive and prevents costly potential errors.
Whatever the circumstances of the transfer, there may also be Stamp Duty Land Tax (SDLT), Capital Gains Tax (CGT) and Inheritance Tax (IHT) implications.
Read more:
Do I pay Stamp Duty Land Tax (SDLT) on a transfer of equity?
Do I have to pay Capital Gains Tax (CGT) on a transfer of equity?
Do both parties need a solicitor when transferring equity?
There are 2 main parties in a transfer of equity a transfer of equity:
- 'Transferor' is the person transferring the equity
- 'Transferee' is the person to whom the equity is being transferred
If the transferee is paying for the equity
If any money is changing hands as part of the transfer of equity, there is a potential conflict of interest. It is therefore advisable for each party to seek independent legal advice from a separate conveyancing solicitor.
If the transferee is not paying for the equity
If no money is changing hands, only the transferor needs to instruct a conveyancing solicitor.
If the transferee is not paying for the equity and there is no mortgage, the process could technically be completed without needing to instruct a conveyancing solicitor.
Even if no money is changing hands, however, transferring property ownership can be a complex process.
Can the transferor and transferee use the same solicitor?
If there is any potential of conflict of interest, separate solicitors should be instructed by each party.
Completely Moved works with a panel of solicitors. We can assign independent solicitors to both the transferor and transferee.
All-inclusive transfer of equity conveyancing quotes with Completely Moved start from ££379 inc VAT.
Do I need a solicitor if?:
I am adding a partner to the title deeds
If you (the transferor) are getting married or entering into a civil partnership, you may want to share the ownership of your home.
When adding a partner to the title of your home, you can ask a conveyancing solicitor to complete the transfer of equity. It would not be necessary for the new partner (transferee) to seek separate legal representation if no money is being paid for the equity.
If your partner is paying for the equity, it is recommended that separate legal representation is sought. If there is a mortgage, the lender will also need legal representation.
Read more:
I am gifting a property to a child, spouse, civil partner or family member
It is quite common for a parent to gift a property to a child, or for a homeowner to gift a property to a spouse, partner or family member.
If you are planning to gift your property, the transfer process can be completed with one conveyancing solicitor.
Read more:
How to gift a property to a child, spouse, civil partner or family member
I am buying out another joint owner
If you (the transferee) are a joint owner of a property and you are buying equity from another joint owner (the transferor), the transferee will need a conveyancing solicitor.
Although the transferor does not technically need a solicitor, it is critical that you are aware of the value of their equity and the terms of the sale.
In most circumstances, it would be advisable for both the transferor and transferee to have independent legal representation from separate conveyancing solicitors.
If there is a mortgage, the lender will also need legal representation.
A joint owner is being removed from the title deeds
If party may is being removed from the title (perhaps following a divorce or separation), the person being removed (transferor) will need to be advised on the value of the equity that they are surrendering.
The person remaining on the title (transferee) will need assurance that the transferor has no future stake or claim on the property.
As a potential conflict of interests exists, both parties would need independent legal advice from separate solicitors.
If there is a mortgage, the lender will also need legal representation.
I am removing my ex-partner from the title deeds
A transfer of equity is often thought of as buying someone out; that is, paying an ex-partner money for their share in a property.
Transferring equity does not necessarily mean that any money changes hands. Separating couples can choose what they want to exchange equity for.
Equity can also be exchanged for assets, such as vehicles or household items. An ex-partner may even agree to be taken off the deeds for no payment at all.
You should consult with your conveyancing solicitor if an asset swap is being proposed.
Although you don't not technically need a solicitor, If you are paying for your ex-partner's equity there could be a conflict of interest. It is critical that you are both aware of the value of the equity and the terms of the sale.
In most circumstances, therefore, it would be advisable for both you and your ex-partner to seek independent legal representation from separate conveyancing solicitors.
My ex-partner refuses to sign the transfer of equity deed
If your ex spouse or partner refuses to sign the TR1 (Transfer Forms) your conveyancing solicitor can apply to the court for a court order. Once a court order has been obtained, the judge can sign the transfer forms.
What if there is a mortgage?
If there is an existing mortgage in place, or if there will be a remortgage completed as part of the transfer, it will be necessary for both the transferor and transferee to instruct separate solicitors.
The mortgage lender will also need separate legal representation. Ordinarily, the transferor's solicitor will also act for the lender. The solicitor will, however, need to be an approved member of the lender’s panel of approved solicitors.
If you instruct a solicitor who cannot act for your lender, the solicitor will need to outsource part of the legal work - adding both time and cost. It is therefore critical that you confirm that your preferred solicitor can act for your lender before you instruct the solicitor.
Members of Completely Moved’s panel of solicitors are approved by over 100 UK banks and building societies.
If you decide to transfer equity without the help of a solicitor:
If you do choose to change your property deeds without a solicitor, you can find the relevant forms on the HM Land Registry website. It’s also a good idea to obtain a copy of the official register beforehand, which costs £3 for an online copy.
You will then need to complete three separate forms available on the Gov.uk website:
- AP1 Form - This is your application to change the register. You’ll need information about your local council, details of the applicants as well as information about any documents which you are enclosing, such as birth and marriage certificates.
- TR1 Form - This form is about transferring the property. Before you fill this in, you will need to find out if the property is registered, and whether there are any clauses or restrictions that require action before the transfer can take place. This must be signed by both of the property owners.
- ID1 Form - This is a form which will verify your identification. You will need to take this to a solicitors’ firm in order to obtain certification of your identity, and some firms may charge a fee for this. You’ll be required to bring a valid form of photo ID, such as a passport or a (full) photocard driving licence from the UK, EU, Isle of Man or the Channel Islands. As well as this, you’ll need proof of address in two forms.
Once you have completed all of these forms and compiled the relevant paperwork, you can then send them to HM Land Registry at the following address:
HM Land Registry
Citizen Centre
PO Box 74
Gloucester
GL14 9BB
