Shared Ownership - eviction

Fat_Parrot

I brought a Shared ownership property 3 years ago purchasing 50%. Due to Ill health and a low income I have gotten into arrears with the rent. I applied for Housing and Council tax benefits but I am only entitled to 1.90 per week. I am currently spending 75% of my wages on travel to get to and from work, which is basically a nil operation but I have been trying to keep things up to date.
The housing association have been very unhelpful when I have asked for help. I have even asked them for help before I got into arrears as I could see a problem coming, with the valuation costs of £150 so that I can sell the property but they are not at all willing to help. I have now been told that the housing association are going to seek a notice of proceedings to repossess the property. My question is if the housing association evict us what happens to the 50% that I have a mortgage on?? Do the Housing association or mortgage lender look to sell it or what. Please help - I am going from pillar to post and not getting anywhere when I have asked for help..... Know one seems to be sure on it as it is shared ownership, which has been the biggest mistake of my life!

Turnbull2000

I believe the current precedent on shared-ownership repossession/eviction is that the housing association can seize your share and any equity in it's entirety - essentially leaving you with nothing.

I'm sure someone else will be able to shed some light on this.

lynzpower

Yes turnbull is correct.

have you spoken to your mortgage provider to see if there is any chance of a temporary "holiday" from the mortgage ( not a long term solution though)

More importantly, what do you mean your job is a "nil operation" do you mean the job is going down the tubes or that you are making no money after you pay for travel?

Scully38

Fat_Parrot wrote: »

I brought a Shared ownership property 3 years ago purchasing 50%. Due to Ill health and a low income I have gotten into arrears with the rent. I applied for Housing and Council tax benefits but I am only entitled to 1.90 per week. I am currently spending 75% of my wages on travel to get to and from work, which is basically a nil operation but I have been trying to keep things up to date.
The housing association have been very unhelpful when I have asked for help. I have even asked them for help before I got into arrears as I could see a problem coming, with the valuation costs of £150 so that I can sell the property but they are not at all willing to help. I have now been told that the housing association are going to seek a notice of proceedings to repossess the property. My question is if the housing association evict us what happens to the 50% that I have a mortgage on?? Do the Housing association or mortgage lender look to sell it or what. Please help - I am going from pillar to post and not getting anywhere when I have asked for help..... Know one seems to be sure on it as it is shared ownership, which has been the biggest mistake of my life!

A few questions, are you getting DLA?
Are you paying mortgage on your S/O are you on interest only or fixed rate/variable etc?
Do you pay rent on the other 50%?
Have you spoken with your mortgage advisor about this?

Read this, see if it helps, its regarding stalling foreclosure.

This is from the CAB about Shared Ownership and struggling to pay.

Cutting down payments on shared ownership properties

If you own your property through a shared ownership scheme, you will usually make a monthly payment towards your mortgage and a rent payment to a landlord. This is often a housing association, or some other kind of social landlord.


If you’re having money troubles, you may be able to reduce your mortgage payments by selling back some of your ownership of the property to the landlord.


This is called flexible tenure. Not all shared ownerships schemes offer flexible tenure so you will need to contact your landlord to check if this is available. You will have to show that you've explored all other options first.


There may be other options available to help you sort out your mortgage or rent arrears.


If you have trouble in meeting your mortgage or rent payments or you are already in debt, you should get help straight away from an experienced debt adviser. A Citizens Advice Bureau should be able to help. To search for details of your nearest CAB, including those that can give advice by email.

Here's some info from Shelter.

I also read on the Direct gov website that you can sell back some if not all of your share if you need to.

St00zer

Know one seems to be sure on it as it is shared ownership, which has been the biggest mistake of my life

Not sure I would blame shared ownership, as if you bought the property with a mortgage I suspect you could be going down the same route. It is just unfortunate you are experiencing ill health.

££sc££

Perhaps first step is trying to up your income in the short term, there will be loads of ideas on the other boards, but could you get a lodger? It may also help getting some money advice from one of the other boards. If selling is really the only solution, i guess you may need to scrape together the valuation fee somehow. Some HAs won't market the property though if there are rent arrears, i'd call a meeting with the housing manager/arrears manager and fully explain the situation.

The reality for the HA is that if they do get a possession order and evict you, they are likely to receive a Mortgagee Protection Claim from the lender. This clause is in most of the newer shared ownership leases and it protects the lender in the event of repossession, the landlord will have to pay off the mortgage, plus some of lender's costs and up to 12 months unpaid interest on the mortgage. This could be a massive nightmare for the HA if you have a fairly substantial mortgage on your share or are in negative equity. Persuading them to add the £150 valuation fee to your debt to them might be a better solution for all of you and I would try and persuade them of this. Make sure you get an appointment with someone that understands shared ownership well from the HA, the majority of HA employees don't!

So in answer to your question if the HA did evict, they would have to pay off the mortgage and they would then own the property 100%. They could then do what they want with it, resell for s/o, rent it out, sell it on open market. However, by that point i don't suppose it would make any difference to you. What you need to try and do is prevent this happening.

Have they served you a Notice of Seeking Possession (NOSP) yet? This is the 28 day notice that the intend to apply to court for possession. In reality when these are served and a copy sent to the lender, the lender often clears the rent arrears on the shared owner's behalf. Although they usually make a charge for doing this and add it to your mortgage balance (so you then pay interest on it).

In the meantime, try not to panic, try to get some advice and keep in touch with lender and HA to let them know what's happening.

Best of luck

Richard_Webster

If the HA evict they will do so by forfeiting the lease and they will need a court order for that. If they forfeit the lease then the lender's security goes out of the window. HA does not have to pay off the mortgage - why should it? You would still have an unsecured debt to the lender.

Most likely what will happen is that the lender will pay the arrears and add it to the mortgage debt to avoid losing their security. They will then take possession proceedings against you and invoke the mortgagee protection clause in the lease to buy in the 100% and sell the whole thing on the open market. If the flat has gone down in value then, if the Mortgagee sells, the HA stands that loss in value, which it can then reclaim off you if it can find you/you have any assets.

Fat_Parrot

Have applied for DLA back in June but am still awaiting an outcome.
Have got a interest only mortgage on my 50% (this is all the mortgage provider can do) and also paying rent on the other half. I am working but by the time I have paid travel costs I have £200 left which mostly goes on council tax. As I can see this is a bit of a mine field trying to find out info. Know one knows the right procedure at the HA.