Do both parties need a solicitor when transferring equity?

Transferring equity in a property from one person to another can occur in a number of scenarios. In most cases, both parties should have independent legal representation.

Couple with solicitor

One party is buying out another party

If an existing part owner of a property (the transferee) is buying the equity owned by another party (the transferor), the transferee will need a conveyancing solicitor.

Strictly speaking, the transferor would not need a solicitor. However, it is critical that the transferor is aware of the value of their equity and they are correctly compensated for it.

In most circumstances, therefore, it would be advisable for both the transferor and transferee to have independent legal representation from a separate conveyancing solicitor.

One party is being removed from the deeds

It may be that one party is being removed from the deeds, perhaps following a divorce or separation. In this case, the person being removed (transferor) will again need to be advised on the value of the equity that they are surrendering.

The person remaining on the deeds (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.

Gifting a property to a child

If you are gifting your property to one or more children, you would usually only need one solicitor.

Can the transferor and transferee use the same solicitor?

If there is any money changing hands there is a potential conflict of interest. It is therefore recommended that each party has independent legal advice from a separate solicitor.

If no money is changing hands, each party could technically use the same solicitor or separate solicitors working for the same firm. However, if there is any potential of conflict of interest, separate solicitor firms should be instructed by each party.

Instructing separate solicitors should not be any more expensive than getting one firm to represent both parties.

Quittance operates a panel of solicitor’s and we can assign individual solicitors to the transferor and transferee.

What if there is a mortgage?

If there is an existing mortgage in place, it will usually be necessary for both parties to have independent legal representation.

In addition, your solicitor may need to represent the mortgage lender. It is standard practice for the same solicitor to represent the transferee and the mortgage lender.

However, the transferee’s solicitor will need to be a member of the existing 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. You can check whether we can act for your lender here.

How can Quittance help?

Whether you are gifting a property to a child, getting married or separating, or transferring equity for any other reason, our panel of conveyancing solicitors can take care of the legal work for you. Even if you are just looking for advice, we can help.

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

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Chris Salmon, Director

Author:
Chris Salmon, Director