For most individuals, their property is going to be one of their greatest assets. Therefore, considering how the equity i.e. the bit of the property that the individual actually owns, is transferred or managed is going to be critical.
In reality, equity may be transferred in many different situations. This article will look at the reasons for transferring equity and comment on the methods of transferring equity and crucially the transfer of equity costs.
Why Transfer Equity?
Let’s look at the reasons that a transfer of equity may be appropriate. The most obvious would be that the property is being sold and therefore is going to be owned by someone else. There may be other reasons, however. For example, when an individual dies and there is an inheritance. Or, where there are gifts being made, for example as a result of a divorce where different people are going to own different aspects.
Methods of Transfer of Equity
One of the first things that has to be done when looking at transferring equity would be to ascertain who actually owns the property, if this is not already known. Information relating to ownership can be found at the official Land Registry. There may be additional transfer of equity costs if the record needs to be corrected before any transfer is undertaken.
After this point, the solicitor will be required to produce the necessary transfer documentation. This may be a transfer agreement or could be a trust document, depending on the nature of the transfer that is taking place.
The documents will then need to be executed (signed), almost always in the presence of a solicitor or notary. So even where solicitors have not been involved in the transfer itself, there will be costs associated with the signing of the agreement.
There will also need to be registration of the transfer, and this can be quite complicated. Therefore, individuals who have chosen to act without the assistance of a solicitor may find it to be a false economy.
Transfer of Equity Costs
The costs associated with the transfer of equity will vary depending on the nature of the transfer that has taken place. Many solicitors, such as https://www.samconveyancing.co.uk/news/conveyancing/transfer-of-equity-cost, will offer fixed fee options. This offers certainty for all individuals.
As well as the solicitor costs, there may be fees to be paid at the Land Registry and perhaps also stamp duty – specific advice is needed in this regard. In particular, consideration should be given to these costs before any transfer of equity is planned as there may be alternative methods that would be cheaper.