We are answering common questions about how deceased co-owners and trusts can affect an Equity Release transaction. We cover what happens if the property was held joint tenants or tenants in common, inheritance, properties held in trust, no grant of probate, and trusts on the title.

Joint Tenants and Tenants in Common

First, we need to know whether the property was held joint tenants or tenants in common. To achieve this we need to find out whether the client is able to help with this. If not, we will require a copy of the title from the land registry. If the clients own the property as tenants in common, there will be a restriction on the title which won’t be there if they hold as joint tenants. If the property is unregistered, we will need the title deeds to the property as soon as possible. This will be the only way for us to tell how the property is held.

If the property is held as joint tenants, all we require is the death certificate for the deceased co-owner. A land registry form will be completed which will remove the deceased co-owner, and this will be submitted to the land registry along with a certified copy of the death certificate.

If the deceased co-owner was tenants in common, we would need the death certificate, the will, and any grant of probate which has been obtained for the deceased co-owner. When we acquire these documents, we’ll read through the information provided and see whether the client has inherited the share of the deceased owner, or whether the property has been left to another under a trust.

Inheritance

If a client has inherited a share from the deceased co-owner, there are some land registry forms that need to be completed, including an RX3, ST5 and a DJP. These will be sent to the client for signature confirming that the statements given are correct and that they have inherited the share of the deceased co-owner. Once they are returned, we will submit them to the land registry and this will provide a new title. For this, we charge a fee of £150+VAT.

The work will normally be carried out alongside the Equity Release and therefore there shouldn’t be a delay. The only additional time will be in relation to updating the title at the land registry. However, this will only take a couple of days.

What if the Property is Held on Trust?

This work will need to be carried out by a lawyer who specialises in wills and trusts. We have a contact here at Equilaw who we referrer work to frequently, and the fee payable will come out of the funds on completion. The lawyer will draw up a document which will assign all of the beneficial interest in the property to the client, and this will need to be signed by all parties to whom the trust relates. Once the lawyer sends this to us, we will prepare the RX3, ST5 and DJP forms. The same additional fee for Equilaw of £150+VAT will apply.

The trust work will be invoiced by the solicitor who carries it out and this will vary on a case by case bases. A quote will be provided before any commencement of work to ensure that your client is happy to proceed with the fee payable, and this will then come out of the funds on completion.

The Client is not on the Property Title

In this scenario, the property will need to have assented into the name of the client, should they inherit the property under the will. The cost of the assent is £250+VAT, and there are other fees depending on the lender. Searches may also be required as the client would have not been on the title for a period of over six months. The client will need to make a payment to us upfront and the cost of this is £300.

If the property is unregistered and in the sole name of the deceased owners, some lenders also require registration of the property prior to proceeding to completion of the Equity Release. There will be a land registry fee which is also payable and this will be dependent on the property value. In this scenario, the client will need to provide a death certificate, the will, and any grant of probate which has been issued.

No Grant of Probate

When there is no grant of probate, one will need to be obtained if a client is not on the property title at all. The case cannot proceed until there is a grant of probate in place. If this occurs, we will place our file on hold and can refer the file to the lawyer who specialises in wills and trusts, and they can assist the client in obtaining the grant of probate. The amount for this work will be given to the client in a quote directly, prior to commencement of any works that can also be paid on completion.

Trusts on the Title

If there is a family trust on the title, the lender will not proceed. The trust will need to be removed and we can refer the file to our wills and trusts specialist lawyer. However, it may be quicker and more cost-effective for the client to go back to the solicitors who put the trust on the title and ask them to remove it instead.

If there is a trust in the title which relates to probate, the client will need to go back to the company who put the restriction on the title and ask them to remove this. We will need the client to confirm once this has been done so that we can request updated official copies of title with the restriction removed.

Key Points

• Equilaw needs to understand how the property was held and require a death certificate, will, and grant of probate as soon as possible.
• If a case becomes more complex than initially thought, a wills trust specialist will carry out additional work and that fee can be settled on completion.