Partial transfer of equity without a conveyancer

SavingSteve

Hi all, hoping for some guidance, most of the research done, one query remains!

1) Own investment property with spouse, as Joint Tenants
2) Want to transfer ownership 99% to spouse & keep 1% myself
3) Property is mortgaged


So, this is what I have narrowed it down to:

1) Sever the Joint Tenancy, do so by completing form SEV, which will put us as Tenants in Common

2) Enter into a Declaration of Trust (I have the wording from a previous such transaction)

3) Send Declaration to Land Registry with form AP1 and £40 fee

4) Inform HMRC:
i) Stamp Duty Land Tax Return, as debt is also transferred (just the form, no payment as debt being transferred is <£125,000 there will be no SDLT)
ii) Income Tax, complete Form 17 so HMRC are aware of new ownership percentages

So, all of the above seems fine and dandy. BUT I assume the Mortgage Co need to get involved at some stage. I called them and all they could tell me was 'usually the solicitors will just send us whatever they want us to sign/review'. But I am trying to do this without a Solicitor.

I feel I have all bases covered other than this last point, anyone know if:
a) The mortgage company even have to know and
b) If so do I need their signature on any part of form AP1 when sending forms to the Land Registry?

Thrugelmir

Mortgage Co will undoubtably want a solicitor to perform the transfer. Given that they have a vested interest in the matter.

Goldiegirl

As long as the mortgage and the property are still held in the same names, the lender will not need to give formal consent to a Transfer such as you describe.

When I worked for a major lender, their requirement was for the mortgage and the property to be held in the same names, they had no interest in who held what percentage. The property will still be held in joint names, and the mortgage will still be in joint names, so there is no change in the situation.

However, to be on the safe side, I would submit copies of the documents to them for their comments.

SavingSteve

Thanks, that's what I thought. The Dec of trust states that we each pay mortgage if other fails to do so, so both still on hook.

Will follow this path, thanks.

Thrugelmir

SavingSteve wrote: »

The Dec of trust states that we each pay mortgage if other fails to do so, so both still on hook.

Doesn't change the terms of your mortgage. Where you are both jointly and severally liable. So the Dec of Trust is of no interest to a lender. As it doesn't over ride the contractual terms you signed up to.

Richard_Webster

Can't see why you need to register it at the Land Registry - a future buyer is only cncerned to see that two of you sign any transfer to him - not what percentages each is entitled to.

Land_Registry

I am assuming that you have looked at our Public Guide 18 with regards joint ownership and section 4 in particular.

Form SEV, if completed and lodged by the registered owners themselves is all that Land Registry requires to note the severance. There would be no expectation for the mortgage lender to sign the form. There is no fee for registering a form SEV.

You don't mention transferring the property but state that you own it with your spouse so there are no issues around transferring ownership it seems.

As Richard Webster states there is probably no need to lodge the Declaration of Trust as we do not record/register the percentage held by each party. In fact the only time we would expect to see such a deed would be as evidence to support the severance where the application is made by someone who is not the owner themselves or does not represent them.

If you remain unsure as to what is required or how to make your applicaiton then Contact Us - we can advise on the requirements and procedure but we cannot provide legal advice

SavingSteve

Thanks Land Registry re Declaration of Trust. In the past we have always lodged this with you, so there is a central record of such a declaration, otherwise it's just a piece of paper that sits in our house, and there is no public record of it.

SavingSteve

Just spoken to Land Registry and lady confirmed I can lodge using AP1, agree not 'needed' but I would like to.

Thanks all!