Tenant in common: selling my share

dutchcloggie

Hello,

I own a mortgage-free property as tenants in common. The other person has agreed to buy my half of the property and the cash is ready to go.

I have NO idea what I need to do now. Do I need a solicitor? Can we use the same solicitor or do need my own? I assume I need to sign something? But what? And what other stuff do I need to do? Is there a step-by-step guide somewhere?

I inherited my share so i have zero experience with ever purchasing property and the probate solicitors sorted everything out when i first inherited the property so I had nothing to do with anything legal back then.

Help?

Thanks.

kingstreet

As there's no mortgage you could probably do the transfer of equity yourself, but as you are inexperienced and there may be stamp duty implications, I'd hire a solicitor. The cost should be in the region of £350 to £400.

http://www.hmrc.gov.uk/sdlt/calculate/transfer-ownership.htm

Transferring or dividing up jointly owned property or land - unmarried couples and other joint owners
SDLT isn't payable if two or more people jointly own property - whether held as joint tenants or tenants in common - and they decide to divide it physically and equally and own each part separately.

But if one person takes a bigger share - or all of the other's share - and pays cash or some other consideration in exchange, then HMRC must be notified of the transaction. And if the amount they pay is more than the current threshold, they'll have to pay SDLT on it.

dutchcloggie

Hi,

Thanks for that.

There is no stamp duty involved as the property is worth less than £125,000.

The transfer should involve nothing more than the other party transferring the money in to my account. I am just unsure of what documents need to be drawn up and by who. Is it enough to just write a letter and say: You have bought my part, it is now all yours, have fun with it?

And what about Landregistry? I assume they need to be involved?

I am a stingy student so I would prefer not to spend money on the solicitor. But I suppose it would be the easiest way?

kingstreet

There are Land Registry transfer forms.

If you go on their site, you will find information. There is a LandReg representative who posts on here. If you give it a couple of days, you should find a post in this thread to help you with your plans.

dutchcloggie

Excellent. I shall wait patiently....

alun4

oh for the days of title deeds, wills, deeds of gift, mortgage, !!! unregistered land .... the future.

BobQ

dutchcloggie wrote: »

Hello,

I own a mortgage-free property as tenants in common. The other person has agreed to buy my half of the property and the cash is ready to go.

I have NO idea what I need to do now. Do I need a solicitor? Can we use the same solicitor or do need my own? I assume I need to sign something? But what? And what other stuff do I need to do? Is there a step-by-step guide somewhere?

I inherited my share so i have zero experience with ever purchasing property and the probate solicitors sorted everything out when i first inherited the property so I had nothing to do with anything legal back then.

Help?

Thanks.

If its all amicable and just a cash transfer you could just fill in the Land Registry forms to transfer the ownership and transfer the funds.

If there is any possibility of a problem it may be worth formalising the agreement to sell in a letter signed by both parties and witnessed by an independent person and then submit the form and transfer the funds.

Clearly if there are any more significant issues it may be worth asking a solicitor to arrange the transfer. Significant issues might include if one of parties is developing dementia, if there are concerns over the value or condition of the property, the other party needs a mortgage to pay for it etc.

One other point, unless you have been living in the property then the sale may involve a liability top capital gains tax but this depends on what you mean by "back then".

dutchcloggie

BobQ wrote: »

If its all amicable and just a cash transfer you could just fill in the Land Registry forms to transfer the ownership and transfer the funds.

If there is any possibility of a problem it may be worth formalising the agreement to sell in a letter signed by both parties and witnessed by an independent person and then submit the form and transfer the funds.

Clearly if there are any more significant issues it may be worth asking a solicitor to arrange the transfer. Significant issues might include if one of parties is developing dementia, if there are concerns over the value or condition of the property, the other party needs a mortgage to pay for it etc.

One other point, unless you have been living in the property then the sale may involve a liability top capital gains tax but this depends on what you mean by "back then".

Thanks for this advice. 'back then' was 2 years ago. My wife used to own the property with her sister. When my wife died, I got her half of the property through her will. I am now going back to university so I need the money to live. My sister in law was more than happy to buy me out. Dementia is hopefully not a problem because my sister in law has not hit 30 yet :-)

So legally, the only thing I have to do is complete a form at the Land registry and transfer the money?

Oh, and I think I have to complete a form for HMRC for anything over £40,000 even if there is no stamp duty involved? I just need to notify them?

Land_Registry

Take a look at our online FAQ with regards how to transfer the legal title from both of you to just one.
NB - you mention that the cash is ready to go but as kingstreet infers above if the other owner is going to borrow money against the property to pay you your share then the lender is likely to insist on their using a solicitor/conveyancer.

Transferring the legal ownership is relatively straightforward as explained in the FAQ but make sure you and the other owner read the notes on how to complete the application.

The other issue which you will need to resolve is the 'tenants in common' aspect which you mention. Guidance regarding this is contained in our Public Guide 18 Joint Property Ownership

When lodging the application to change the ownership it will be necessary to consider and deal with this aspect. As the 'outgoing owner' it is probably unlikely to impact on you directly but the remaining owner should consider it as well.

In essence to remove the restriction it would be necessary for you to 'deduce the equitable title' - the PG explains this in more detail and section 5 provides general guidance on what is likely to be required. The section refers to a surviving owner but essentially the same application and evidence would be required.

In the circumstances I would recommend that both of you view and understand the online information and then decide whether legal advice/assistance is required.

If you require assistance in completing the form or lodging the application then you can Contact Us but please note that we cannot provide legal advice.

davemal

Many thanks for all the info Land Registry representative,

I am a little confused by the wording tbh

---

In this circumstance form RX3 must be used to cancel the Form A restriction. The form must be signed by you or by a conveyancer acting on your behalf. It must be accompanied by evidence that you have:

• become entitled to the whole of the property, that is, no one else owns or has any interest in any share of the property so for example if all the other shares have been left to you in the will of the other co-owner(s) who has died you should lodge a copy of the probated will
• not encumbered your share in the property, that is, you have not done anything that would affect or limit your share in the property (for example by mortgaging it), and
• not received notice of any incumbrance on the share of a co-owner(s) of the property who has died.

Land Registry will accept a statutory declaration or statement of truth (see Practice Guide 73 – Statements of truth) by the owner or a certificate from the conveyancer acting for the owner provided the conveyancer has personal knowledge of the facts. Please provide any documentary evidence available.

---

Could "evidence" be a letter from me stating that all 3 bullet points above are met?

and is a "Statutory Declaration" another name for "statement of truth"
or are they seperate things.

Thanks
Dave

Land_Registry

It is a tricky subject to understand and as it can affect not only the legal ownership (Land Registry) but also the beneficial one it is one which often needs to be discussed with a legal adviser.

A statutory declaration (stat dec) is the traditional form of providing a statement of facts in a wide number of circumstances and not simply from a land registration perspective.

The Statement of truth forms were introduced fairly recently for land registration purposes only. As you suggest though they are effectively the same thing.

A letter from a private individual is not sufficient.

NB - the issue of the restriction and tenants in common status is something which the 'other person' should be aware of as having it removed would normally be part of the process of transferring the title from the two of you to just him/her. As such it would be their stat dec/statement of truth and not yours which would be required. It is for him/her to confirm that they have become solely and beneficially entitled for example.