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A transfer of equity is required where the ownership of the property is to change but at least one of the original owners will remain as an owner (as opposed to a sale and purchase of the property where the original owner will have no continued interest in the property). There are different circumstances where a transfer of equity would be required. It could be that the property is currently owned by a sole owner and an additional party is to be added to the ownership. The property could currently be owned by joint owners and one of those owners is to be removed from the ownership of the property and the property is then to be owned by a sole owner. Or it could be that the property is owned by joint owners and one of those owners is to be removed from the ownership and replaced by an alternative owner.
Transfers of Equity can take place subject to an existing mortgage on the property only with that Lender’s consent. Lenders all have differing requirements in this regard but will all require that an administration fee is paid to them before consent can be given. We advise that if you wish to transfer a property subject to a charge that you contact the Lender and ascertain their requirements in this regard before proceeding with the transaction. Obtaining the Lender’s consent at the earliest possible opportunity will ensure the fastest possible timescale is achieved.
Transfers of Equity can also take place at the same time as you are remortgaging the property. In this situation no Lender consent is required. It is crucial to ensure that the new mortgage application is completed by the intended owners of the property once the Transfer has taken place and not the current owners.; e.g. if the property is currently held by a sole owner and the intention is to transfer to joint owners then the mortgage application should be made by both joint owners.
It is a common misconception amongst clients that Transfers of Equity do not attract stamp duty but this is not correct. Any Transfer of land has the possibility of incurring stamp duty and we would strongly advise that you check with us as to the stamp duty situation at the outset.
The residential property team consists of Andrew Orriss and Haqib Iqbal in our Luton office; Ian Simpson, Jane Joseph, Mandy Cowen and Trevor Kidd in our Harpenden office; Mel Lawrence in our Milton Keynes office.
Contact us for more information or advice either by telephone or email on firstname.lastname@example.org