Common questions relating to Principality Building Society transfer of equity
- My brother and I got a joint mortgage with Principality Building Society on a property a couple of years ago. I am now looking to get a property on my own and my friend would like to buy me out. Assuming we can agree a figure where do we go? Is there likely to be any concerns with Principality Building Society with him being solely liable for the total mortgage rather than only part of it?
- As things stand I have a joint Principality Building Society mortgage with my brother and am investigating the feasibility of him assuming responsibility for the whole mortgage and subtracting myself from it, to enable me to purchase a property with my partner. The remaining mortgage is about 300k, and the property value is in the region 450k. Is this a transfer of equity? Is stamp duty due?
- Principality Building Society have today agreed I can take over the home loan on my home. I had applied for a transfer of equity but is this a transfer of ownership at the Land Registry as well?
- Have recently separated from my ex of thirty years. I'm now back with my parents again and she wishes to remain in the property and pay me off. What portion am I entitled to. Is it half of the equity after discharging the mortgage with Principality Building Society? I assume proper valuations are necessary but I really need ensure that I'm getting the best deal
- My decree absolute has gone through as is the consent order. Now I have to deal with the transfer of equity for the property and the Principality Building Society home loan. I have called Principality Building Society for the transfer of equity forms. What do I do now?
- How do I go about adding or removing names (transfer of equity) to or from my Principality Building Society mortgage account?
- What should I be budgeting for when it comes to what solicitors costs are for a transfer of equity? I'm in the process of remortgaging - moving over to Principality Building Society - and have been quoted £350 excluding VAT by Principality Building Society's approved lawyer, Is this a reasonable price?
Information that may be required from your conveyancing solicitor may ask in relation to your Principality Building Society Transfer of Equity
Is it the case that one of the registered proprietors passed away? If so please forward us with a copy of the Death Certificate, Probate and a copy of the Will.
Who will be responsible for the costs of the Transfer of Equity?
If are intent on holding 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 whether you are receiving any payment as part of the Transfer or Equity and from whom and provide details of the amount?
Please let us know of you wish us to draft you Declaration of Trust. If so are you happy to pay for the further fee (beyond the Transfer of Equity fee)?
Please confirm the person to be removed from the title deeds will not reside at the property after the transfer of equity has been formalised?
Information to consider in conjunction with the above Principality Building Society transfer of equity Questions and Answers :
Tax and Legal
There are numerous potential tax and legal implications when transferring equity for your property. You should always seek the advice of a solicitor on the Principality Building Society conveyancing panel and accountant before transferring equity.
Transfer of Equity Conveyancing for Leasehold properties
Should the tenure of your property be leasehold, the lease may have a requirement for notices to be served and that you obtain the consent of the freeholder. If such conditions are not complied with you may be in breach of the lease. This could potentially result in the freeholder taking enforcement action against you.
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 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 conveyancing solicitor will check with Principality 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 Principality 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 market value of the property at finalisation of the transfer of equity conveyancing.
If you do not keep up the payments on your mortgage with Principality Building Society your property may be repossessed.
Preparing the Transfer of Equity with a Principality 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 Principality 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 conveyancing solicitor should describe the transfer as ‘transfer of equity’ to assist Land Registry staff.
Content 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.