Shared Ownership Rent Problem Pls Help!!!

Liam2121

I took (sole) ownership of a property under shared ownership. I own 40% and have a mortgage on this. However I have been in the property 5 months and the rent (on the shared ownership 60% side) has increased 3 times within this time. Is this legal firstly and secondly, the lease (which gave details of the rent figure [originally £218 per month}) which I signed and agreed to has never been met as when my first payment was due, they put the rent up a second time to £233.45. Which they have now notified me they have increased this to £270 per month

I have spoken to the shareed ownership company who says that they have realised that the previous owners never had an increase over the 2 yrs they lived and they have had to bump it up a few times to set this right.

Is this legal and can this be right. They apparently work out the rent on the Index of national earnings, but my earnings do not match this at all and with the propery prices falling, how can they warrant an increase, especially 3 of them in such a small space of time? Any advice or guidence would be useful please as my solicitor hasn't a clue and nor does my Citizens Advice.

ruggedtoast

I recommend you suck it up, pay your rent and in future, never, ever, buy into a shared ownership con again.

lynzpower

Is the organisation you bought it off a Housing association or a company?

If the housing association ,then I suggest you speak to the housing corporation who manage the guidance and so on of SO from HAs. I used to have a SO and it was written fully into my lease WHEN the raises will happen and by WHAT amount. Mine went up about 8 quid per month, as agreed, on the first week of October annually. It was tied to RPI ( iirc it could have been CPI)

If you have bought from a company, im not sure what protection there is. I would suggest though that it sohuld be outlined in your lease.

Did your solicitor not discuss this with you when you were involved in the conveyance. My sol made it crystal clear to me what "issues" there were, being the rent increases - how and when and other onerous clauses for edxmaple no musical instruments/ pets / satellite dishes etc.

lynzpower

How do you pay, by stnading order or direct debit?

If it is standing order YOU send them the money if DD they take the money from your bank.

Liam2121

This is paid by Direct Debit. The shared ownership is from a housing association called Jephson's. I have spoken to them but they are fobing me off. I have also written a letter to see what response I will get there. My solicitor didnt know too much about shared ownership so of course, didnt go through the details with me. I have looked through my lease and there is nothing to say about a regular increase or what amount it will go up by. The previous owners never had an increase and they were in the property for over 2 years.

I'm not sure who can help or who to talk to about it???

frannyann

Feel for you, as own 60% of my flat and have had multiple problems from the start and would never recommend it to anyone!

ruggedtoast

I cant begin to imagine how the mess of accountability between rent, maintenance, ground rent and market value is worked out in an SO scheme but if you are any other kind of tenant you have two responses to an unfair rent demand; arbitration at a fair rent committee or moving out.

Your council housing office should be able to put you in contact with the people who accept rent disputes, though if you dont have a normal AST they may not be able to help much.

One of the many downsides of SO schemes is that you have to pay rent at a level the administrators of the scheme determine, and if you want to staircase your buying them out at the value they determine not what the market would set. You effectively have the worst of both worlds between renting and owning.

If I were you Id sell up now if you can escape without loss. I really mean it - SO scheme properties are already about as popular as a leper on a nudist beach and its only going to get worse.

(The previous owners rent is not relevant im afraid)

lynzpower

Ruggedtoast, the way the rent and so on is set in Housing sassociations, it monitored and managed by the housing corporation.

Op Ive had a little dig about for you.

The housing corporation states:

Rent is normally payable in advance, but you should not be asked to pay more than one month’s rent in advance. You must not be charged ‘key money’ or asked
Page 13
for a deposit (unless your home is furnished). Different rules may apply if you are buying your home.
Your housing association must give you information about:
• the way your rent is set;
• the levels of rents across all of its homes and across the local area; and
• how good it is at collecting the rent.
You must be informed in writing, in advance about any changes in your rent. Rent should not be increased more than once a year unless by mutual agreement. Check your agreement to see how much notice you should be given or ask your housing association. Many housing associations where tenancies are shorter than one month (for example, weekly) set a fixed day for increasing rents.

http://www.housingcorp.gov.uk/upload/pdf/Charter_for_HA_applicants_residents_20071003112048.pdf

P13 of above doc

What if I don’t agree with the rent and other charges?
Your housing association must tell you about your rights to appeal about your rent and to challenge service charges; this information will usually be given to you when you are told about the increase. Your rights will depend on the type of
agreement you have signed. You should look at your agreement and ask your housing association for information about your rights. You can also ask your local advice centre or a solicitor

Housing associations must provide good quality services for residents and people applying for a home and must offer high standards of customer care. They are also expected to be open, honest and transparent in the way they operate

If you want information about your rights as a tenant, a leaseholder or shared owner, what you can claim and how to exercise your rights, you should contact your housing association. The information may be in your tenancy or lease agreement, a handbook or guide or in leaflets and material provided by your housing association. Your rights will depend on the type of agreement you have and what type of accommodation you live in

.

For leaseholders, generally, the terms of a lease can only be changed with your approval, although a court can impose the changes if you cannot agree changes with your landlord.

Therefore, my advice to you is:

Find your lease and have a good read through of it. Find the bit that states that they can change the rent whenever they feel like it and that you tacitly agree to that.

I suspect the lease will say nothing of the sort and IME, I would suggest that the HA is struggling for cash ( as lets face it, its finance will be constricted as everyone elses are at the mo) and scrabbling a about for more.

Unless it expressly states this ( and even if it does, I would question whether the clause is a reasonable one) then it certainly appears ( and it was my understanding from my own sol & the housing corp) that your HA is in the wrong, and that you should only have one rent increase PA, and that it had to be agreed in advance by you.

Liam2121

I contacted the housing corporation but they refuse to give any advice or help as they do not have a department who can look into the issue or provide me advice. I did also mention regarding the document that was kindly passed to me from the housing corporation site and they say that this is only to do with rented properties, this has nothing to do with shared ownership.

I'm still awaiting reply from the letter I sent to the shared ownership asking for a written explanation and details. I would like to thank everyone for there comments, especially "lynzpower" as these ahve been helpful. Any further advice or anything is welcomed, obviously constructive comments would be prefered as I am still looking into this issue. Surely I aint the only person this has happened to?

lynzpower

hiya again Liam

I just took the opportunity to ring the housing corp myself- as sometimes different people get different answers!

they just said that the bottom line is that your LEASE will tell you how often your rent can be increased.

Have you got a copy of your lease, what does it say about rent review?

I hope you dont have to go back to your solicitor on this, so if i can help you to understand your lease I will do, if the lease says they can vary the rent when they please, then- you should look at testing whether it is a fair clause. If it doesn then its back to the coplaints process within the HA and refusing to pay until it has been determined one way or the other.

Have you been given ANY written notice that the rent will go up, Id expect that 28 days notice is about right, less is a bit onerous IMO.

Liam2121

Lynz,

I'll tell you something, its nice to know some people are willing to help, but for someone to go out there way by calling and getting involved, thats something you don't see everyday. That's very appreciative what you did. Thank you xx

My lease does state that it reviews every April of the year (which occured and rent was increased), but I didnt notice anywhere stating the amount of times an increase can happen or by what amounts. It's far from being clear them sort of things. However, I did notice a comment regarding value of the property is taken in account when working out the rent (also the national average earning index), however if a decrease in property value occurs, they wont decrease the rent, it will remain stable.

I did receive notice of the recent increase, with 44 days notice. I have been given a lease advice number which I will be calling but first I am awaiting response from Jephson's from the letter I sent them.

I hope I don't have to go back to my solicitor as she was lovely but they have never been involved with Shared Ownership before, so I don't think that be any good.