When a relationship breaks down, you need to decide what will happen to the home you share. Mark Laird, Head of Property at Morrish Solicitors, gives advice on how to transfer a property.

The breakdown of a relationship can be a stressful time. Especially if you are joint owners of a property. Often one owner will decide to take on the other owner's share of the property. This can help to give a sense of normality throughout what will undoubtedly be a period of upheaval and change. If you decide to go down this route, there are a number of important considerations to be taken into account.

Buying the other party out

When a couple is divorcing, the court will make an order detailing how any marital assets should be divided. This will include whether the home is to be sold, or transferred to one of the owners.

Laird says: “When the separation has been amicable, the parties can come to an agreement where one person pays the other for their share. This payment will usually be a cash lump sum, but in some situations, it could also involve taking on sole responsibility for any debt secured against the property.”

Lender consent

You must also take into account that if you have a mortgage on the property which you are not planning to pay off, then it will be a condition of the loan that you do not transfer the property without the lender's consent.

Laird continues: “This condition means that you must obtain your mortgage lender's approval to transfer the property into your sole name. Your lender will reassess your financial position and will only consent to the transfer if your meet their lending criteria.”

Also, you need to be aware that simply preparing and signing a Transfer Deed will not make you the legal owner of the property. In order for you to become the sole legal owner of the property, you must register the transfer with Land Registry. Land Registry will not register the change of ownership without any consent required from your lender.

Bradford Telegraph and Argus: Mark Laird, Head of Property at Morrish Solicitors, gives advice on how to transfer a property.Mark Laird, Head of Property at Morrish Solicitors, gives advice on how to transfer a property. (Image: Morrish Solicitors)

Stamp Duty still applies

If the amount you are paying for the property is over £250,000, you will have to pay tax. It doesn’t matter that you are buying somebody else's share in your property, Stamp Duty Land Tax applies just as it would when you were purchasing the property outright.

Laird adds: “It’s also important to remember that if you are assuming sole responsibility for a mortgage previously in joint names, the total price for Stamp Duty purchase includes the total being paid for their share in the property as week as the other person's share of the mortgage debt.”

Insolvency provisions

If you are being gifted the share in the property, or if you are paying less than the share of the property is worth, then you need to check that the person transferring you their share in the property to you is solvent.

Laird concludes: “HM Revenue has the power to set aside a transfer not made for full market value if they believe the transfer was made to put the property out of the reach of creditors. This could have an impact when you come to sell the property.”

As with all property transactions you should seek the advice of a qualified property solicitor. To find out more about Morrish Solicitors’ residential property and conveyancing services, see their website or call 033 3344 9600 or email info@morrishsolicitors.com.

Alternatively, you can make an appointment at their office in Bradford city centre, head office in Leeds city centre, or one of the branches located at 51a High Street in Yeadon and at 9 Lowtown in Pudsey.