An equity transfer is when the person who currently owns a property either adds or removes another party from the deeds; for example, someone could be added to the deeds when a couple marry and want to combine their assets, or one of those named on the deeds to the house could be removed if a couple split and want to divorce.
When two people are named on the title deeds of a property, they are referred to as joint tenants or tenants in common. The difference between these terms is the percentage of ownership and what happens when one of those named dies. Joint tenants each hold a 50 per cent share of the property, whereas tenants in common hold unequal shares; for example, if one party put more into the property, they could have a greater share.
The other difference is what happens to the property if one of those named in the title deeds were to die. In the case of joint tenants, the ownership would automatically be passed to the surviving partner. This is different with tenants in common, as the wishes of the person who dies are followed in accordance with the terms of their will.
Four reasons to transfer equity
– The transfer of equity may occur to add a spouse to the title deeds of a property after a couple marries. This is especially important if the couple share the mortgage payments on the home.
– In the same sense, when a couple divorces, they may wish to transfer equity to the sole occupant if one of the couple moves out of the residence.
– A transfer may also occur when friends or family members buy a property together and each own a percentage of the property.
– Finally, parents may wish to add their child or children to the title deeds of the residence so that the house is passed on to the others named on the title deeds when the parents die.
The transfer of equity involves several steps. These are as follows:
– Firstly, the title deeds will be reviewed by the solicitor, the current owner and those who wish to be included on the deeds.
– After this, the document that will transfer the deeds to all parties will be completed.
– Once this step has been finalised, the transfer deeds will be signed by the parties involved and sent to HM Land Registry.
– Finally, the equity will be transferred to include all parties.
If you want to transfer equity in your home, be sure to get legal advice from a solicitor or licensed conveyancer.