When one person is prepared to remove another co-owner or adding another person jointly as a co-owner, it is legally considered an “equity” transfer of the house and it entails a separate contract to be signed. It is not a straightforward case and here’s are the things to consider.

Tip 1: Existing Housing Loan Status

Assess the Status of the Existing Loan

• Loan Not Fully Paid Off: If the property still has an outstanding housing loan, the title deed is typically held by the bank. In such cases, the joint owners must first seek the bank’s consent before proceeding with the transfer. This is because any change in ownership can impact the bank’s security interests in the property. The bank’s approval is discretionary and depends on several factors.

Bank’s Considerations

• Impact on Loan Security: The bank needs to ensure that the new ownership structure does not compromise its interests. For instance, the bank will evaluate whether the new co-owner can afford the mortgage payments and whether the property can still be auctioned effectively in case of default.
• Borrower’s Status: The current borrower’s continued presence on the title is not the primary concern. Instead, the focus is on the financial capability and reliability of the new or remaining co-owner(s).

Tip 2: Refinancing Requirements

Need for Refinancing

• Common Requirement: Banks often require owners to refinance the property loan when there is a change in ownership. This involves signing a new loan agreement, paying stamp duty again, releasing the previous borrower, and re-registering the mortgage on the title deed. This process ensures that the bank’s security interests are updated and maintained.

Exceptions and Special Cases

• Transfer Subject to Charge: In rare circumstances, a transfer of ownership may be allowed without refinancing. However, this is uncommon and typically subject to strict conditions. Even in these cases, the bank will perform background checks and require the new owner to submit proof of income for loan approval.

Additional Considerations

• Financial Documentation: The new or remaining co-owner(s) will need to provide comprehensive financial documentation to demonstrate their ability to service the loan.
• Legal and Administrative Costs: Be prepared for additional legal and administrative costs associated with the transfer, including legal fees, stamp duty, and possibly fees for mortgage registration.

Tips 3: Fees?

The legal fees and stamp duty payable for conveyance of an undivided share of the property would be based on the market value of the property. It is similar to a legal fees payable when you purchase of a house. You should find out and assess you budget before you proceed further.