Leasehold and shared ownership
Leasehold transfer of equity
Adding or removing an owner on a leasehold flat or house, with lender consent, the landlord's requirements and any property tax due.
Every cost on its own line: the law firm's legal fee, VAT, the searches and other third-party costs, and any property tax. Your quote opens as soon as you send the form.
Ask the landlord or managing agent early what it charges for notices, consents and any deed of covenant. These fees are set by them and vary between buildings.
A transfer of equity changes who owns a property without selling it, for example adding a new partner to the title, removing someone after a separation, or passing a share between family members. On a leasehold property there is an extra layer: the lease may require the landlord's consent, a deed of covenant from the incoming owner or formal notice of the change.
This service is for adding or removing owners on a leasehold flat or house, with or without a mortgage. If the property is part of a shared ownership scheme, mention it, because the housing association usually needs to approve the change.
Your quote works out the likely Stamp Duty Land Tax from the details you give about the share, any payment and the mortgage owed, and adds the leasehold admin fee. It lists the landlord's fees too, to be confirmed once they are known. If you go ahead, Keyfolio introduces you to a regulated law firm to handle the change.
What is involved
A leasehold transfer of equity usually runs as follows:
- Instructions: confirming who is joining or leaving, what share is moving and any money changing hands, with identity checks on everyone involved.
- Lender consent: any mortgage lender has to approve the new ownership. Someone joining usually becomes a borrower too, while someone leaving is only released if the remaining owner meets the lender's affordability rules or takes out a new loan.
- Lease requirements: checking whether the landlord's consent is needed and whether the new owner must sign a deed of covenant promising to keep to the lease.
- Tax: working out the chargeable consideration and whether Stamp Duty Land Tax or its Welsh equivalent is due, including any exemption for couples who are separating.
- Documents: preparing the transfer deed and, where owners will hold unequal shares, a declaration of trust.
- Completion: the transfer is dated once all the signatures, any payment and any new mortgage money are in place.
- After completion: filing any tax return, registering the change at HM Land Registry and giving the landlord notice, usually with a fee.
What the legal fee covers
- Identity checks on everyone joining, leaving or remaining
- Checking the title, the lease and any landlord consent requirement
- Liaising with your lender for consent or a new mortgage
- Working out whether property tax is due on the transfer
- Preparing the transfer deed and any deed of covenant
- Arranging signing and completion
- Registering the change at HM Land Registry
- Serving notice of the transfer on the landlord
Costs you may see on top
- The leasehold admin fee
- The HM Land Registry fee for registering the transfer
- Landlord or managing agent fees for consent, notices or a deed of covenant
- A fee if there is a mortgage to transfer, repay or replace
- Your lender's fees for a new mortgage or for releasing someone from the existing one
- Stamp Duty Land Tax if the chargeable consideration is large enough to be taxable
- A declaration of trust if the owners will hold unequal shares
- Identity checks for each person involved
What to have ready
- Names of everyone on the title now and after the change
- Details of the share that is moving and any money being paid
- Your mortgage details, including the balance and the lender's consent or new offer
- A copy of the lease and the landlord's or managing agent's contact details
- Any court order or separation agreement, if the transfer is part of a divorce or dissolution
- Photo identification and proof of address for everyone involved
How long it takes
A leasehold transfer of equity commonly takes 4 to 10 weeks, depending mainly on the lender and the landlord. Lender approval or a new mortgage offer is often the longest step, and some landlords take time to give consent or confirm their fees for the deed of covenant and notices. Where no mortgage is involved and the lease needs no consent, it can be quicker. Agreeing the share and any payment before you instruct, and sending everyone's identity documents early, both help.
Things to watch for
- Stamp Duty Land Tax is based on what the incoming owner gives for the share, including any part of the mortgage they take on, not on the property's value. Taking on half of a £200,000 mortgage, for example, counts as £100,000 of consideration.
- If the person joining has a poor credit history, the lender may refuse to add them to the mortgage, which can stop the transfer. Speak to the lender or a broker first.
- If you own through shared ownership, the housing association usually needs to approve any change of owner, and the new owner may need to meet the scheme's eligibility rules.
- Transfers between spouses or civil partners on divorce, separation or dissolution, under a court order or agreement, are usually exempt from Stamp Duty Land Tax.
- Check whether the lease requires the landlord's consent before the transfer. Completing without it can breach the lease.
Questions people ask
What is a deed of covenant?
It is a direct promise by the new owner to the landlord, or to a management company, that they will pay the service charge and keep to the terms of the lease. Many leases require one whenever someone new joins the title, even if the existing owner stays. The landlord or managing agent usually charges a fee to register it, which your conveyancer will confirm before completion.
Does the landlord need to agree?
It depends on the lease. Some leases require the landlord's consent to any transfer, others only require notice afterwards, and many require the new owner to sign a deed of covenant with the landlord or management company. Your conveyancer reads the lease, contacts the landlord or managing agent and tells you about any fees before you commit.
Can I come off the mortgage as well as the title?
Only if the lender agrees. The lender will usually assess whether the remaining owner can afford the mortgage alone, and may require a new mortgage or a guarantor. If the lender refuses, the transfer may not go ahead as planned, so speak to the lender or a broker before you instruct a conveyancer.
Should we sign a declaration of trust?
If the owners will hold the property in unequal shares, or one of you is putting in more money, a declaration of trust records who owns what and what happens when the property is sold. It is often prepared alongside the transfer. See declaration of trust for how it works.
Who does the work
Your matter is handled by a law firm regulated by the Solicitors Regulation Authority, the Council for Licensed Conveyancers or CILEx Regulation, or in Northern Ireland by a solicitor regulated by the Law Society of Northern Ireland. At the moment the law firms on our panel act for property in England and Wales, so for property in Northern Ireland we tell you whether a firm can act for you before we pass your details to anyone. The firm confirms who will work on your file, their experience and its terms before you instruct it. How we choose our firms.