Transferring on Divorce Legal Expertise
Solicitors for Transferring Equity on Divorce
Property is often the most significant asset in a marriage or civil partnership and is at the core of most financial settlements in a divorce.
The way you decide to divide the property you own is up to you and should be looked at as part of the overall divorce settlement you reach.
The matrimonial home is usually sold upon separation and the proceeds are divided between the two parties. However, sometimes the property is transferred so that one spouse becomes the sole owner.
What Is a Transfer of Equity in a Divorce?
Simply put, equity is how much of the home you own.
Transferring equity is the legal process where an existing property owner adds or removes someone to the title deeds of the property. There’s no sale of the property and at least one of the original owners will stay the same.
In a divorce, the transfer of equity typically involves removing one spouse.
In some cases, a new partner may also be added to the deeds during the property transfer.
When Is the Best Time to Transfer Equity When Divorcing?
Timing is critically important when arranging a transfer of equity.
You may be keen to push it through ahead of the end of a tax year or before a mortgage offer expires.
Family law solicitors will usually advise waiting until the final court order has been received, as this will set out the financial agreement for divorcing couples.
Waiting for the final court order means that you won’t have to transfer the equity back if the judge does not agree with the transfer.
However, if you do need to transfer equity before the divorce is finalised, reversing a transfer of equity is an option.
What Are the Key Steps in Transferring Equity?
The transfer of equity process can be relatively simple, but there are a few key considerations that you’ll need to make.
In the case of a divorce or a relationship breakdown, however, several additional points should be considered.
- Inform your mortgage lender – If you’re paying off your outstanding mortgage payments before removing your ex-partner from the title of the property, you are under no obligation to tell your mortgage provider. If you’re keeping your existing mortgage once the transfer of equity has been completed, you will need to obtain your lender’s consent.
- Instruct a conveyancing solicitor – Your conveyancing solicitor will work closely with you to carry out the legal work for the transfer of equity and guide you through the process.
- Verify new joint-owner funds – If a new partner is being added to the title and they are paying for the equity, your conveyancing solicitor will verify the source of funds as part of the standard anti-money laundering checks.
- Review the title deeds – The solicitor will obtain and review the property’s title documents from the HM Land Registry.
- Review and sign the legal documents – The solicitor will complete the Deed of Transfer and other legal documents for the transfer of equity. The transfer legal documents will then be signed (and witnessed) by all related parties.
- Transfer the funds – The conveyancing solicitor will arrange for the transfer of any funds to the relevant parties.
- Complete the Stamp Duty return – Your solicitor will need to complete the Stamp Duty Land Tax return and file it with HMRC after the transfer has been completed, even if there is no Stamp Duty to pay.
- Register the new owner – The outgoing spouse or partner will be removed from the title at HM Land Registry. If equity has been transferred to a new spouse or partner, the title will be updated accordingly.
Reach out to Our Expert Team
Here at Home Property, we are a full-service conveyancing practice with teams covering every conceivable aspect of property law.
Therefore, if you need support with transferring equity, remortgaging, or any other legal advice relating to conveyancing issues, we can help.
To chat to one of our expert property solicitors, you can call us at 0333 433 0275, email us at hello@homepropertylaw.co.uk, or fill in our contact form.
