Shared equity property, builder gone bust

gembob9

Hi all, first time poster here so go easy on me!

I own an apartment that I bought some time ago. It was bought under a shared equity scheme with the builder. I own 75%, and they own 25% which is to be repaid upon selling/remortgaging.

A couple of years after I bought it, I got married, moved out and started letting it out. I obtained consent to lease from my mortgage lender and all was fine. Now, I've just spoken to them to request consent to lease again as the original consent is expiring soon and they've sent me the form through. On the form it asks if the property is shared equity and if so do I have permission from the other party, i.e the builder. The original form didn't ask this and it never occurred to me to request their permission as the main lender had granted theirs.

This week, I've tried to contact them but it appears that the company has been dissolved. I haven't had any notification of this, but then I don't believe I ever told them I moved out so any correspondence would have gone to the apartment and who knows what the tenant at the time might have done with it. Obviously in hindsight I see I should have told them I'd moved and that would have prompted the consent to lease questions, but at the time as above the building society were fine with it, so never thought.

My question now is what should I do? I need to obtain this permission, but I've no idea who now owns the 25%, I'm going to give the maintainance company a call tomorrow and see if they know as they were given the management contract at possibly around the same time as the dissolution of the builder. It could even be them I suppose.

What would normally happen in this situation? Does someone take control of the remaining assets of the company that's being dissolved? Normally I guess they'd get sold but maybe that's not the case when property is shared equity.

Very confused, so any help is appreciated, thanks in advance!

davidmcn

There's a government department that inherits forgotten property of dissolved companies, but probably more likely is that the company's interest had been transferred before it was dissolved - have you tried checking the Land Registry?

gembob9

Thanks for the quick reply!

Yes, well sort of. I can see the property listed there as both freehold and leasehold (i guess for the land owner and the apartment owner) but you had to pay to get the details. Is there anywhere i can find the information for free?

Doozergirl

gembob9 wrote: »

Thanks for the quick reply!

Yes, well sort of. I can see the property listed there as both freehold and leasehold (i guess for the land owner and the apartment owner) but you had to pay to get the details. Is there anywhere i can find the information for free?

It's £3 to find out who owns 25% of your property! It's a reasonable investment.

Next time, tell your freeholder when you don't live in a property and you can save the £3.

divadee

gembob9 wrote: »

Thanks for the quick reply!

Yes, well sort of. I can see the property listed there as both freehold and leasehold (i guess for the land owner and the apartment owner) but you had to pay to get the details. Is there anywhere i can find the information for free?

Not that I am aware of but its only £3 to get the information.

Nebulous2

On a slight aside - have you thought about / are you in a position to buy them out?

I know somebody with a shared ownership property in the same way the builder retained a share to get the property to shift. They are getting very positive noises about the minor owner now being open to a deal.

It might be worth a punt if you find the owner or liquidator.

gembob9

Doozergirl wrote: »

Next time, tell your freeholder when you don't live in a property and you can save the £3.

Thank you for your input but this isn't very helpful. I said in my OP that i didnt think at the time. It wasn't intentional!

Also the freeholder does know, it's the co-owner that doesn't

gembob9

Have considered it but it's essentially an interest free loan so would make more sense to reduce the mortgage

Nebulous2

gembob9 wrote: »

Have considered it but it's essentially an interest free loan so would make more sense to reduce the mortgage

I'm not sure you got the point I was making. It isn't an interest-free loan. It is a loan where the interest consists of 25% of any appreciation in the value of the house.

The person I know was told the builder would accept an offer below 25% of valuation, as they want to turn an illiquid asset into cash. If you expect the valuation / price of the house to appreciate then that could be considerably better than paying off some of the mortgage.

gembob9

Ahhhh yes good point. If they'll take a low offer that might work.

It's something I'll need to sit down and work out as currently I'm in negative equity with it. It's recently been valued and is now worth 12% less than i paid for it, so the housing market here will have to go some way before its worth more than the combined equity.

The builder already stands to lose 5k on their original share value so I don't know if they'd take much less but it's worth asking. Thanks

eddddy

gembob9 wrote: »

I own an apartment that I bought some time ago. It was bought under a shared equity scheme with the builder.

So assuming you're in England/Wales, it will be leasehold.

Who do you pay ground rent and service charges to?

If it's a managing agent, they will tell you who the freeholder is. They can probably also tell you about the process for getting consent to let.

(Perhaps be a little cagey, and ask about the possibility of getting consent to let. The lease may forbid it, and so you may want some breathing space to evict your tenant!

Or you could just read the lease yourself.)

Edit to add...

And I would be 100% certain that the builder's share of ownership has not simply been forgotten about. Unless the value of the apartments has dropped to £0.00, 25% of a bunch of apartments would be a valuable asset. It will have been transferred (sold) to somebody else.