Can a Housing Association still maintain rights over a 100% owned freehold property?

rhubarb1

We are in the process of buying a repossessed house that was previously jointly owned by a HA. After many months of delays we have received the conveyancing report and it appears that the HA have added clauses to the contract.

One clause is that we give them first refusal if we plan to sell within the next 21 years which is fair enough.

But another clause states that we are not to make any alterations or additions to the exterior or interior of the property without their prior written consent. Our solicitor says this is because all the houses were originally HA (although mostly private now) and were built to certain specs which they want to keep, especially if they want to buy it back in the future.

Now is this a commonplace practice when buying an ex-HA house? It does seem rather unfair, a bit like selling a car but keeping a spare set of keys in case you need it. Surely if we are buying the house 100% then it is ours to do with what we like? The only people we are obliged to approach about possible extensions is the council.

So before I phone the HA ranting and raving, I just need to know other peoples thoughts and whether this is a generally accepted practice or not. After all there are many unfair things in this life I am discovering, that are merely accepted.

ILW

Sounds like a covenant, quite common with many properties.

rhubarb1

Ok, let's put it this way. We have been in the process of purchasing this house since October and despite assurances that we'd be in for Christmas, we are no nearer to a completion date.
This is due to hold ups and delays by the HA and they haven't even signed over the freehold yet.

Yes we are buying 100% of the house. Entirely. The leasehold is being transferred over to us, the property becomes a freehold.

I have checked the previous conveyancing report for 1988 and this clause about not making additions to the house was not in that. Having done my research it seems that it is normal for restrictions in the first conveyancing report to be transferred over but it is not common for them to add on new clauses.

This is a new clause they have added on. We have only just discovered this after spending hundreds already on searches and waiting months for all the documents to be signed. It's like they left it to the last minute so that we wouldn't pull out. Not even our solicitor warned us, it's in the small print that luckily we read.

Basically even though we are purchasing the freehold of the house 100% they still want to maintain control. Now I am a very polite person who normally wouldn't say boo to a goose, but I make no apologies for feeling angry. However, I have chosen to double check this situation before I call anyone.

I am not going to swear or abuse anyone, but yes if they insist on keeping this clause in then I am going to be upset and angry. Sorry if you think that is unreasonable.

tamarto

You do know that no one is forcing you to buy the house, don't you?

And this situation is nothing like your little analogy, to be the same the HA would have put a clause in saying that they can use the house to home tennants whenever they please...

Had you plans to change the house once in then?

ILW

As above, if you do not like the terms, walk away and buy something else.

casper_g

The previous conveyancing report probably didn't show this restrictive covenant because at that time the property was still leasehold, and this sort of restriction would have been covered by the lease?

rhubarb1

No, no-one is forcing us to buy the house but to be honest, once you think you've checked everything, you've seen the first conveyancing report, you've done all the searches then you decide to buy the house and you start making plans.

What you don't expect is for the HA to insert a brand new clause that allows them to hang onto control of the property.

Would you buy a house if you knew that the previous owners had placed restrictions on what you did with that house? Whether you had plans or not, it's the principle. We have lived in rented housing for 5 years (privately) and the reason I wanted to buy was so that I would not have to ask permission to make alterations. So that the house would be ours, our home to do with what we liked.

Yes we have plans for a conservatory and a front porch. But according to this new clause, we have to have written permission now before we can do that.

I do think it unfair that they should insert this new clause at the last minute. Having done some more Google research, yes covenants are common but they are made clear early on in the buying process, not once you've paid for all your searches, valuations etc.

This isn't just about how it affects us either, there is no time limit on this clause. So if we come to sell, it will still be in place. Again, would you buy a property if you knew it came with such restrictions?

So we can either pull out now and lose all that money, tell the kids that they won't be moving into that new house they've got all excited about and start all over again, or we could risk buying it in the knowledge that we may find it extremely difficult should we come to sell.

If they wanted to retain so much control they should never have agreed to sell the house, they should have kept their share and sold it as a shared ownership.

skylight

So get the written permission now if you want a conservatory and front porch.

DVardysShadow

rhubarb1 wrote: »

So we can either pull out now and lose all that money, tell the kids that they won't be moving into that new house they've got all excited about and start all over again, or we could risk buying it in the knowledge that we may find it extremely difficult should we come to sell.

Always, we come to this argument in these situations. I have to buy this property for the gratification of a bowl of soup now and then I will have to live with the inheritance of something I don't want to live with for the rest of my days.

Forget the emotional, if you don't like it, don't go with it. But if the clause has been slipped in at the last moment, then I suggest you go back to your solicitor and say that the HA have acted in bad faith in slipping it in so late and ask him to get the HA to take it out. Or you walk.

MrsManda

I think you need to ask the HA why the clause has been included.

The fact that the conveyancing report from 1988 did not have this clause is likely to be irrelevant as the house would've been a council property not a HA one. That's why you get a new conveyancing report when buying a house.

I found this on the Basingstoke Council website though I cannot find similar information elsewhere:

I want to extend my ex-council house. What do I have to do?


The Council disposed of its entire housing stock in 1995 and did not retain any interest.
As a consequence the Housing Associations must give consent to any proposed alterations.

www.basingstoke.gov.uk/council/legal/faqs/excouncilhouses.htm

rhubarb1

Wow you lot are sympathetic aren't you? It's like being on mumsnet.

Fine, forget the emotional issue and the 'bowl of soup' - patronisation, thanks. We've just spent over a grand on solicitors fees and searches and mortgage fees. Not at any one stage did either the Agents or our solicitors bring this clause up.

Now our solicitor is telling me that this is a very common clause and should we buy a different house, we may find that clause in there. Can I ask how many of you home-owners have this clause in your contracts?

We may well walk away from this purchase because it will affect future sales of the house. Who wants to buy a house outright only to find that they need written permission to do anything to it?

I think it's an unreasonable clause. It's unreasonable to add it now to the transfer of the lease. It's unreasonable not to tell the buyer about it until the last minute.

When I posted this I thought I might get some helpful advice about whether or not it was a natural pitfall of buying an ex-HA house and perhaps even some experiences of how others have dealt with it, whether or not it was a big deal and perhaps ways around it. I guess I'm naive about peoples good nature.

FWIW, I didn't even raise my voice to the solicitor and doubt I will do so to anyone else. That's why I normally get walked all over, because on the odd occasion I do get angry, I'm told that I'm the one being unreasonable and everyone else is right.