I have been with my partner for some time. We live together, but the house is in my sole name. We are not married. Please let me know the legal issues with transferring the property to our joint names.
Firstly, if you have a mortgage, your mortgage company will need to consent to the transfer. I would only proceed with such an arrangement if you are sure of the stability of your relationship. Solicitors tend to be cynical of this!
You will need to decide whether to co-own the property as ‘joint tenants’ or ‘tenants in common’. If you choose joint tenancy, any proceeds of the property are split equally and the property automatically passes to the survivor should one of you die. With tenancy in common, in either equal or unequal shares, the co-owner does not inherit the deceased’s share and you can leave your share to another person.
If you wish to go ahead, having considered carefully what would happen should your relationship fail, there are a number of other aspects to consider, in particular the Insolvency Act.
What do you mean by this please? I am not insolvent!
Under the Insolvency Act, if you wish to give away a share in your property, and then if you should go bankrupt within a certain period, your Trustee in Bankruptcy (the name for a person taking administrative responsibility for the financial affairs of a bankrupt and the distribution of assets to credits) could claim back this share from your partner.
Why is this?
This legislation was introduced to prevent a person protecting their property when they are in financial difficulties by transferring it into their partner’s name, as that asset would be out of the reach of anyone trying to claim debts from that person.
What are the implications of this?
When making the transfer, your mortgage company may require an indemnity policy to protect them from the risk of your Trustee in Bankruptcy claiming back the property. Should you try to sell the property within the next five years, a buyer’s solicitor may also be concerned about a possible claim. In this case, a buyer’s solicitor may also request an indemnity policy to protect them from this risk.