Questions and answers: Family Building Society transfer of equity

• My Family Building Society mortgage is in joint names with ex, who has agreed to be removed and put the house in my name alone. Family Building Society will permit the transfer of equity to my individual name. Do Family Building Society get in touch with my company to verify my salary?
• Will I have to pay any fees for a Transfer of Equity where the existing mortgage is with Family Building Society?
• What legal advice do I need when doing a transfer of equity where the mortgage is to remain with Family Building Society?
• Can I transfer the equity held in my property with my Family Building Society mortgage?
• Been looking at consumer blogs that solicitors are more expensive than conveyancers for transfer of equity conveyancing. Am I better of using a conveyancer or a solicitor where I need to be transferring equity and simultaneously remortgaging with Family Building Society
• Three years ago I bought a property without my wife's name on the deeds. My conveyancing solicitor claimed it is due to the fact that she is not in the mortgage with Family Building Society. Is it possible for me to put her name on the documents at HMLR?
• As things stand I have a joint Family Building Society mortgage with my step-brother and am investigating the option of him assuming responsibility for the outstanding mortgage and extracting myself from it, so as to enable me to buy somewhere with my partner. The remaining mortgage is in the region 175k, and the property value is about 500k. Is this a transfer of equity? Is land tax payable?

Sample of questions in a conveyancer questionnaire concerning a Family Building Society Transfer of Equity

Important warnings to consider in supplemental the above Family Building Society 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 Family Building Society conveyancing panel and accountant before transferring equity.

Transfer of Equity Conveyancing for Leasehold properties

If your property is leasehold, provisions in the lease may have a requirement for notices to be served and that you obtain the consent of the freeholder. If such restrictions are not strictly observed you may be in breach of your covenants under the lease. This could potentially result in the freeholder taking enforcement action against you.

Indemnity Insurance

If the transfer of equity is made pursuant to an Order of the Court, then Insolvency Indemnity Insurance is not required. In other cases, 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 Family Building Society 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 Family Building Society 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 is dependent on the valuation of the property at finalisation of the transfer of equity transaction.

Preparing the Transfer of Equity with a Family Building Society 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 Family Building Society 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 lawyer 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 does not constitute 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.