How Do You Transfer A House Into Joint Names?
Posted on 2nd June 2020
When the legal title of a property is transferred from one person’s sole name into joint names (for example, of the original owner and a partner, friend or spouse), the process is known as a Transfer of Equity. Our Property Solicitors in Preston explain how you can go about transferring a property into joint names, and some things to consider before proceeding with the transfer.
Whilst the process itself is fairly straightforward for our team of Property Solicitors in Preston, there are some important factors that you should consider before making the decision about whether or not to proceed with your transfer.
What are the different types of Joint Property Ownership?
In England and Wales, two or more people can own a property in one of two ways: as joint tenants or as tenants in common.
1) Joint tenants is when a property is owned jointly between the parties, with neither holding a quantifiable share. If one of the owners dies, the property would pass to the surviving owner under the Right of Survivorship.
Under the Right of Survivorship, the property cannot be gifted and will not pass under the Rules of Intestacy, instead passing automatically to the surviving owner. The reason for this is that neither owner has an identifiable share in the property- they simply own it together.
2) Tenants in Common is when each owner has a set share in the property. These shares are usually dealt with in two ways: they can be equal (i.e. 50/50 between the two owners) or unequal shares (i.e. 30/70 between the two owners).
Each person’s share is the ‘beneficial interest’ that person has in the property and, when they die, this share will be theirs to gift under their Will or, alternatively, will pass under the Rules of Intestacy, which you can read about in our Preston Solicitor’s blog, here.
When do you decide how you want to own a property?
If you are buying a property in joint names, your property solicitors in Preston would usually ask you near the start of your matter how you want to own your property.
Similarly, if you are looking at transferring ownership of your current property into joint names, your conveyancing property solicitors in Preston would ask you near the start of your instructions about how you and the new co-owner wish to own the property.
Updating the Title of the Property
Your Conveyancing Property Solicitors in Preston will obtain Official Copy Entries from the Land Registry (usually at a cost of £3.00), also known as the property title. However, if the property is unregistered, they will need to request that you provide them with the Title Deeds, which they can then inspect.
Once your Property Conveyancing Solicitors are satisfied that everything is in order with the title, they can arrange to prepare a Transfer Deed, which will transfer the property from your sole name to joint names. All of the new joint owners will need to sign the Transfer Deed, which records the transfer of the title.
As part of the Transfer Deed, our Conveyancing Property Solicitors will include written instructions about how you want to own the property in this document. For a full explanation of the Transfer Deed, and what information it includes, you can read our Property solicitor’s blog, here.
If you are owning the property as Tenants in Common in unequal shares, our property solicitors may suggest that all parties enter into a Declaration of Trust, which is explained briefly in our team’s blog, here.
What things should you consider before transferring the property?
If you are thinking about transferring your property, there are some other factors that you should consider prior to committing to any transfer:
1) Is your property currently mortgaged? If you have a mortgage on the property, you will require the permission of the mortgage company to transfer the ownership. The new owner will also need to be joined as a party to the mortgage. As part of the transfer, your Conveyancing Property solicitors will be required to comply with any lender’s requirements as part of the transfer.
2) If you own a leasehold property, you may require consent from your freeholder or managing agent to proceed with the transfer. Like when you buy a leasehold property, the new owner may be required to execute a Deed of Covenant at an additional cost. If this is necessary, your Property Solicitors in Preston will be able to advise you of any extra fees.
3) If the property is owned in your sole name, and you have previously invested money into the deposit, legal purchase fees and decorating the house, if you transfer it into joint names, held jointly, your new co-owner may be equally entitled to the value of the house, without any legal protection for the money you have already spent. If you separate in the future, you may lose out if you do not consider protecting your position. You can speak to our Property Solicitors about this prior to proceeding with your transfer, by contacting us online, here.
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