Transfer of equity refers to the process where property ownership is transferred from one owner to the other. For example, if a couple with dual ownership are separating then the number of ownership is changed. Similarly, when couples get married the ownership may change to dual ownership. Solicitors are rarely involved in property transaction because the steps involved are clear and straightforward. However, it is recommended to involve a solicitor when you are not sure what to do, or if the other party to the transfer of equity has a solicitor. The property can be given to another person or be taken from someone else.
Conditions of Transfer
There are many conditions under which a property can be transferred. Transfer of equity can happen when one party writes of his will to another individual, marriage, separation, inheritance or gifts. This happens mostly when parents give off their properties to their offspring. The offspring becomes the new owner. This method of transfer usually involves the original owner writing some kind of a will. The will may mention one or more new owners. The property is distributed according to the will of the original owner. Wills do not have to be written for immediate family members. The owner can write it to anyone he wants at any time in his life.
Similar to wills are gifts. An owner can give his property to another person as a gift. This happens when the owner wants to give off the property while he is still alive. Wills are usually processed after death. Gifts can be processed when the owner is still alive. Properties that are exchanged as gifts are not paid for by the recipient.
The other method of transferring properties is by exchanging it with some money. This process of transfer of equity is divided into two types. There is one in which the new owner pays the original owner a minimum of £40,000 and the other in which he pays a maximum of £40,000. Properties can also be transferred with mortgage loans and secured loans entirely or partially paid for.
Process of Transfer
The share of one of these people is relinquished or divided during the transfer. All parties involved must have an agreement for the transfer of equity to take place. A “Deed of Transfer” document is distributed for the parties involved to sign. If the property in question is involved in a mortgage, the new owner should make arrangements to pay the mortgage.
The basis of the transfer of equity is that at least one of the original owners must retain the ownership of the property. If one of the parties to a property that is owned by two people drops his shares to the existing party, the transfer of equity is described as 2-1. The first digit represents the number of old owners while the second digit is the number of new owners. Change of ownership from four people to three people is posted as 4-3.
“DIY Transfer of Equity” Kit
Individuals can do their own conveyancing for transfer of equity with “DIY Transfer of Equity” kit. With a kit, all the steps, documents involved and best practices are mentioned which you have to follow to complete the transfer of equity. However if the property is in mortgage, a remortgage may be involved. With solicitors, the transfer of equity and remortgage may be considered a single work.
After the transfer of equity is complete, the regular property transfer steps have to be completed. Stamp Duty Tax may be due, and need to be cleared. The name of the owner on the title deed have to be changed at the Land Registry.