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Co operative Bank transfer of equity: q and a’s

  • I am transferring my equity in property in Hendon to the other co-owners fiance, they are sticking with Co operative Bank as the the existing lender. We are haggling as to who must pay the legal bill for the transfer of equity. Is this normally shared or is one party obliged to cover the charges for?
  • My current home loan is with Co operative Bank. Can I transfer equity to someone under eighteen years old?
  • My mum died seven months ago leaving a mortgage-free property to me and my brother 50:50. He has always lived in the property, there was a provision in the will specifying that the housecould not be sold for 24 months after her death so he could reside there for a while. He now says he would like to remain in the property beyond the specified period. We have considered a transfer of equity. Am I right in saying we'd get a valuation then he'd get a home loan in the conventional way to acquire my half from me?
  • I intend to refinance my maisonette in Rye moving from Chelsea BS to Co operative Bank. The maisonette is jointly owned but I would like it to be in my sole name once I transfer. My former partner is OK with this and is happy to transfer equity but neither of us want to get a second conveyancing solicitor involved.
  • My mortgage broker has suggested using their conveyancing solicitor for the Transfer of Equity plus remortgage with Co operative Bank - won’t it be better to just instruct them?
  • How do I go about adding or subtracting names (transfer of equity) to or from my Co operative Bank mortgage account?
  • Do I need legal advice when doing a transfer of equity where the mortgage is to remain with Co operative Bank?

Sample of information requested in a lawyer questionnaire concerning a Co operative Bank Transfer of Equity

Has consent been obtained from Co operative Bank to the proposed transfer of equity?

Please let us know of you wish us to prepare Declaration of Trust. If so are you willing to incur the additional fee (beyond the Transfer of Equity fee)?

If you are adding a person on to the title deeds how do you wish to hold the property? Please provide your instructions by completing and returning a“Joint Ownership Declaration” Questionnaire.

Where you are going to hold the property as beneficial Tenants in Common in unequal shares, what is the split to be. For e.g. 50-50, or 60-40?

Please confirm the person to be removed from the title deeds will not reside at the property after completion of the Transfer of Equity?

Please confirm whether this Transfer of Equity is part of any Matrimonial Proceedings? If so, please provide the name, address, telephone number and reference of the Matrimonial Solicitor instructed to act, along with a copy of the sealed Consent or Court Order?

Important warnings to consider in supplemental the above Co operative Bank transfer of equity information :

Tax and Legal

There may be various tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Co operative Bank conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold properties

If your property is leasehold, provisions in the lease may require that you obtain the consent of the landlord. If such conditions are not complied with you may be in breach of your covenants under the lease. This could trigger the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made as a result of an Order of the Court, then Insolvency Indemnity Insurance is not required. In other situations, where a property is being transferred at less than market value between joint owners, an Insolvency Act Indemnity Insurance policy may be required. This is something that that your lawyer will check with Co operative Bank This is because, if the outgoing party is made bankrupt in the future, their Trustee in Bankruptcy could argue that they had transferred the property in order to avoid their creditors and apply to the Court to have the transaction set aside. If this happens, it could affect your lender or a future buyer from you as they would lose the property and the lender may not get back what they have loaned to you. The Insolvency Act Indemnity Insurance policy only protects lenders such as Co operative Bank or future buyers from you. If there is no mortgage and the outgoing owner is made bankrupt, there is a risk to you that you could lose your home if the transfer is set aside. The cost of the Insolvency Act Indemnity Insurance policy varies based on the valuation of the property at the conclusion of the transfer of equity conveyancing.
Your property may be repossessed if you do not keep up repayments on your mortgage with Co operative Bank.

Preparing the Transfer of Equity with a Co operative Bank Mortgage

When it comes to preparing the the Land Registry documents your lawyer should in the ‘consideration’ panel choose the first option, if consideration is given; otherwise ignore the consideration panel altogether.

If Co operative Bank is joining in the transfer to release someone from liability, put the release in the ‘additional provisions’ panel if someone is entering into a covenant relating to the charge, place it in the ‘additional provisions’ panel stamp duty land tax is not payable when there is no chargeable consideration for the transfer (Schedule 3, paragraph 1 of the Finance Act 2003). In the case of a transfer subject to a charge (even if the transfer is by way of gift) or if a property has been transferred for no value and there is an associated discharge, HMRC would view this as an assumption of an existing debt by the purchaser (Schedule 4, paragraph 8 of the Finance Act 2003) and stamp duty land tax may be payable if you wish you may state in the ‘additional provisions’ panel that ‘This transfer is made subject to a charge dated… in favour of…’

On form AP1, your conveyancer should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.

Information provided on this webpage is for general information and only applies to England and Wales. It should not be regarded as advice for members of the public who should contact their lawyer,mortgage broker, insurer and accountant for specific advice relating to transfer of equity. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.


Frequently asked questions relating to Co operative Bank transfer of equity