Ask The Expert: 'Should we be worried about title deed changes?'
Friday 16 March 2012
Q. We are in the process of buying a house from a couple who are splitting up. When we offered on the house both were on the title deed. But now they have registered the house in her name and he has taken out a charge against the property. Should we be worried?
A. Technically, alarm bells should be ringing here. By registering the charge the husband has given notice of his matrimonial home rights, which include a right to occupy. Depending where the couple are with their divorce and financial discussions you could well find yourselves subject to his occupation rights until their divorce settlement is sorted out.
I would normally expect to see the husband's rights settled at the point he transferred ownership over to his wife. I suggest you ask your solicitor to check where the couple are currently in their divorce proceedings. It may be that an agreement has been reached. Your solicitor will need to secure an undertaking from the seller's solicitor that the notice will be removed upon completion of this sale.
The husband is probably more concerned with protecting money rather than the right of occupation itself. Once the house is sold and the notice has been removed, and the money is available, the couple can argue over its division for as long as they like.
Q. My husband and I have a flat in east London worth £490,000, with an outstanding mortgage of £315,000. We are based in Greece and our daughter lives in the flat. We would like to pay off a chunk of the mortgage, then sign it over to her, and she can probably get a mortgage for about £250,000. How do we go about doing this?
A. I suggest that you reduce the mortgage by making a payment to your lender. If you have an accountant, inform them so they can advise you in relation to inheritance and capital gains tax.
Your daughter may wish to consult her bank or a financial adviser to raise the mortgage. You should consult a lawyer to deal with the transfer of the equity in the flat from your joint names into your daughter's name.
Some or all of the funding which your daughter obtains needs to be used to pay off the balance of your existing mortgage, so the flat can be transferred into her name.
If the amount paid by your daughter does not exceed £250,000 and she has not owned a property before, she may benefit from the current (until 24 March) exemption from stamp duty for first-time buyers.
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