Shared equity house sale after death

intmstan

Hello Everyone,

I wanted to post as ask for some advice regarding the sale of a property that we have just completed for a member of our family who sadly passed away.

Background

The property is a shared equity (25% owned) social housing project with the 75% owned by a housing association that actively promotes itself as socially responsible.

The property was owned for 19 years from new and is a terrace in a close of 20 properties. The property when sold was pristine in condition both internally and externally. Some works had been completed over the years (new windows for example) cost of these was covered by ongoing service charge. Upon sale a RICS survey was completed that stipulated that the property was in good condition and no work was needed.

The problem.

1. The lease for this building was 19 years old. The company who owns the 75% has gone through a number of acquisitions during that time so the original lease has gone missing. (They cannot produce it). We have a copy of the lease via the will but it is difficult to understand and very vague at best.

Upon sale the estate has been forced to pay an amount equivalent to 14% of the sale price into a fund (think they are calling it a sink fund) to cover the cost of a new roof (is the example they are giving us). Now there is nothing wrong with the roof, has never been and according to the survey isn't likely to be.

The 14% payment is calculated on the number of years that the resident lived there, times the original sale price, times another figure. It actually calculates as 28% of the original purchase price.

My question is: Does this sound fair to you? I am concious that a contract has to be deemed fair to be enforceable in law. So how can a person who has died be expected to pay for a roof (or car park or whatever) that did not go wrong in the time that they lived there and are demonstrated to be in good condition at the time of sale. Surely that would be the responsibility of the person who is purchasing the property as it would be with any house?

We consider this to be a punitive financial penalty that is grossly unfair - what do you guys think?

2. During the period from death until sale (around 6 months) the estate was expected to pay rent on the 25% period owned. We were unable to rent the property out in this time as the housing company would not let us (There was plenty of demand). This figure comes to close to another 5% of the sale price.

Can this be considered fair? Or another punitive financial measure.

The amounts of money involved are not huge but the person who passed away did not have a lot of money (Hence why she was in a social housing shared ownership scheme) in the first place. She worked her entire life to leave behind a small estate to benefit grandchildren which is now being swallowed up by the housing authority. For us there is a point of principal to be made here as well as the financial aspect.

I am being led to believe by others that the OFT have already commented on this industry sector and in particular charges that are raised by the management companies. I will post the link when I can find it (I cant for some reason at the moment but I know it exists as I have seen it!!)

I know this is a long post so thank you for reading it. Any help or advice would be appreciated before I instruct a solicitor to simply sue the housing association

(They deduct all this money out of the sale price so that already have it - they wont authorise the house sale without it)

intmstan

Bump.

Any thoughts anyone?

££sc££

sorry to hear of your bereavement.
my thoughts are that clauses like liability to pay into sinking fund and pay rent (even after shared owner's death) would be in the lease. You need to get hold of a copy of the lease. If the social landlord don't have the original, your relative or their solicitor from purchase should hold the counterpart. Alternatively apply to land registry although this will cost £20-30. I personally wouldn't instruct a solicitor until you've got a copy because it's the first thing they'll ask for.

(the rent clause is very common in my experience, but the sinking fund does seem a little odd. whilst sinking funds are very common you usually pay in an amount each year not a big go in one hit - unless your relative had been in arrears with paying in to it?)