Shared-ownership eviction!

Turnbull2000

Not happening to me thank god, but thought this would be worthy of a new thread saying as I often see SO queries.

http://www.guardian.co.uk/housing-network/2011/aug/25/shared-ownership-problem

According to the main test case, that of Richardson v Midland Heart, a shared owner can be evicted for non-payment of rent. Richardson had failed to pay her rent for the share she didn't own. Was she an owner, or a tenant? In the end, the court decided that not only could she be evicted, but she was also not entitled to the share of the property which she had owned, and which had increased significantly in value.


The housing association, Midland Heart, agreed to refund her initial deposit, but it was not obliged to do so.

Another problem emerged when tenants on a rent-to-buy scheme near the 2012 Olympic site were served with eviction notices in May – one year before their agreements were due to end. The Rent to HomeBuy initiative allows a tenant to rent a new property at below market prices (allowing a deposit to be saved) before deciding whether to buy the home. Again, the nature of their assured shorthold tenancies means that these tenants have no legal recourse.


Anecdotal evidence suggests that first-time buyers, at the bottom of the chain, are unable to ascend that metaphorical ladder not only due to the reluctance of lenders to provide mortgages, but also because of the spiralling cost of deposits.

carefullycautious

Interesting reading, this should be pinned somewhere

Turnbull2000

Bump in response to the "shared-ownership is fantastic" thread.

dopester

Another example in the link below where a woman's shared ownership house here got repossessed. Their "capital" share of the property went back to the Housing Association. Shared owner thinks they have real equity in their place? Not for her, and likely not for so many other "shared owners" in schemes.

Apparently, nearly 1 in 100 households in England has a shared ownership lease. It therefore follows that 1 in 100 households are in for a very nasty shock, when they discover that they do not necessarily own a share of the property!

As a note in the NLJ puts it, the householder was not, it seems, the owner of a half-share in the property; indeed, in that situation there will have been no shared ownership at all. What the householder owns is the lease and nothing else – and once the lease has gone (when possession is given to L) then that is the end of the householder’s stake in the property. Thus, once rent arrears have accrued, tenant only has a short window of opportunity to pay off the debt or otherwise lose the whole investment.

That is what happened in a case where a 50% householder paid the rent for ten years; then, however, her husband was.....

In addition, it is always worth looking at the express wording of the shared ownership lease; some early model leases from the Housing Corporation recite that T pays a capital sum to acquire a half share in ‘the premises’ (ie the freehold), so in some cases it may be possible to argue that there is an express declaration of trust. But, as it stands, the situation for many shared ownership Ts is potentially bleak.

http://www.practicalconveyancing.co.uk/content/view/10570/1124/

debrag

Well they should have been paying the rent as well as the mortgage. If you want to sell in the future best to not get shared-ownership.