Do both parties need a solicitor when transferring equity?

A 'transfer of equity' is when an existing owner of a property (or land) adds or removes one or more other people to the title (ownership) of the property.

There are various reasons why you might decide to transfer equity, including buying out an ex-partner, gifting a property to a child or adding spouse, civil partner or unmarried partner to the deeds (title) of your home.

In some cases, both parties will need independent legal representation for a transfer of equity.

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Transferor or Transferee?

In the context of a transfer of equity in a property or land, the:

  • 'Transferor' is the person transferring the equity
  • 'Transferee' is the person to whom the equity is being transferred

Do both the transferor and transferee need a solicitor?

If the transferee is paying for the equity

As an overarching principle, 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.

Whatever the circumstances of the transfer, there may also be Stamp Duty Land Tax (SDLT), Capital Gains Tax (CGT) and Inheritance Tax (IHT) implications.

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.

Read more:

Do I have to pay Capital Gains Tax (CGT) on a transfer of equity?

Do I pay Stamp Duty Land Tax (SDLT) on a transfer of equity?

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.

Quittance Legal Services is a panel of solicitors. We can assign independent solicitors to both the transferor and transferee.

All-inclusive transfer of equity conveyancing quotes with Quittance start from £384 inc VAT.

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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 Quittance’s panel of solicitors are approved by over 100 UK banks and building societies.

Before you instruct, check that your solicitor can act for your lender.

If your solicitor is not on your mortgage lender's panel, it could cost you more money in additional fees and could delay your move.
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I am adding a partner to the title

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 conveyacning 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:

How do I add a spouse or partner to my property deeds?

I am gifting a property to a child

One of the most common reasons for transferring equity is when a parent gifts a property, or a share in a property, to a child.

If you are gifting your property to one or more children, 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.

One party is being removed from the title

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.

How we can help you

Whether you are gifting a property to a child, getting married or separating, or transferring equity for any other reason, we can help you find an expert conveyancing solicitor. Even if you are just looking for advice, we can help.

If you are also planning to remortgage as part of the transfer process, the remortgage legal work can be completed at the same time as your transfer of equity.

  • Transfer of equity experts
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Chris Salmon, Director

Author:
Chris Salmon, Director