Property Ownership 

What happens to the ownership of the property?

Over the years home ownership in the UK has provided many people with the opportunity to make a financial gain whilst providing them and their family with a place to live – ‘their home’.

Equity Release provides many of these same people the opportunity to unlock some or all their financial interest whilst retaining the right to live in their home for the rest of their life through a lifetime lease.

Who legally owns a property?

In the UK, property ownership has two components:
  • Legal Ownership
  • Beneficial Interest
The Legal Owner will be registered at the land registry, most title deeds are held in electronic form only, resulting in the absence of physical title deeds. 

Beneficial Interest holds all the financial benefits relating to the property. In most domestic situations, the person who is the Legal Owner of the property will also own the Beneficial Interest. However it is also possible to split Legal Ownership and Beneficial Interest.

Why do we split Legal Title and Beneficial Interest when setting up a Home Reversion plan?

This is done in order to protect the mutual interests of both the customer and Bridgewater ensuring that neither party can therefore do anything outside the terms of the agreement.

The Legal Owner is required to handle any legal matters affecting the property e.g. dealing with solicitors, estate agents and all other parties associated with property transactions. The Legal Ownership does not affect who is entitled to the proceeds’ of sale. The proceeds of any sale belong to the person owning the Beneficial Interest.  Beneficial interest is divided in accordance with the equity shares of the property the parties have purchased or retained. The property is held on trust by the Legal Owner for the person owning Beneficial Interest, so that each party’s equity interest is protected.

Property ownership in the context of Equity Release should be considered from two perspectives:
  • Right of tenure
  • Financial interest

Why does Bridgewater assume Legal Title?

Within a home reversion plan, the home reversion provider is the Legal Owner and so takes responsibility for the sale of the property when the property is vacated. This means the family are not burdened with the responsibility of dealing with the property sale at an already difficult time. Bridgewater is also responsible for ensuring that the sale proceeds are paid to the estate in accordance with the Beneficial Interest noted in the Declaration of Trust, provided an interest has been retained.

How are the interests of the Beneficial Owner protected?

Beneficial Interest is protected in two ways:

  1. A Declaration of Trust is issued which documents who owns what proportion of the Beneficial Interest.
  2. A Lifetime Lease is granted at the commencement of the plan which protects your clients right to occupy the property and provides them with security of tenure for life.
The Declaration of Trust is held by us as Trustees who will always be there, so in the event of death or moving into care, we will deal with the sale of the property and distribute the proceeds of sale according to the Beneficial Interest noted in the Declaration of Trust. The Trustees are legally bound to distribute the benefits in accordance with the Declaration of Trust.

Why does Bridgewater assume Legal Title?

Within a home reversion plan, the home reversion provider is the Legal Owner and so takes responsibility for the sale of the property when the remaining client dies or moves into care. This means the family are not burdened with the responsibility of dealing with the property sale at an already difficult time. Bridgewater is also responsible for ensuring that the sale proceeds are paid to the estate in accordance with the Beneficial Interest noted in the Declaration of Trust, provided an interest has been retained.

How are the interests of the Beneficial Owner protected?

  1. A Beneficial Interest is protected in two ways:
  2. A Declaration of Trust is issued which documents who owns what proportion of the Beneficial Interest.

Lifetime Lease is granted at the commencement of the plan which protects the clients right to occupy the property and provides them with security of tenure for life.  The Declaration of Trust is held by us as Trustees who will always be there, so in the event of death or moving into care, we will deal with the sale of the property and distribute the proceeds of sale according to the Beneficial Interest noted in the Declaration of Trust. The Trustees are legally bound to distribute the benefits in accordance with the Declaration of Trust.