Shared ownership subletting

ybx2011

Hi,

I know this isn't going to be a popular post with many but I am looking for some advice.

I have recently been offered a fantastic job abroad (1yr contract) and really wish to take it. However, I have a shared ownership property, I could not afford for this to stay empty so would like to rent it out for the period. I would not want to 'make money' only cover the costs of the property itself.

I am doubtful my housing association would give me permission to sub-let, so wondered if anyone has done this without informing them? and could provide some advice, or experience on this?

I am sure I would achieve a rent that would cover costs...and am also sure that others in a similar position have done, and are doing, the same.

Any advice/experiences/anecdotes would be greatly appreciated.

eddddy

TBH, there are other considerations, including...

If you have a mortgage, you should get your lender's consent as well.

And most importantly, you need the correct buildings insurance for letting.

If your tenant does something daft and burns down the building, your insurance claim could be rejected if you don't have the correct insurance.

kingstreet

It's SO and therefore leasehold.

The building will be insured by the HA as the freeholder. No way of knowing the terms.

eddddy

kingstreet wrote: »

It's SO and therefore leasehold.

The building will be insured by the HA as the freeholder. No way of knowing the terms.

Assuming the Freeholder is recharging Leaseholders for the insurance, Leaseholders have the legal right to inspect/copy the Freeholder's insurance policy.

The Freeholder commits an offence if they refuse, and is liable for a fine of up to £2,500 if they refuse.

Landlord and Tenant Act 1985. See para 2 - especially 2.(4)
http://www.legislation.gov.uk/ukpga/1985/70/schedule


Unless Shared Ownership has different rules.... does it?

NOVAMET21

I'm sure many people do it and are getting away with it.


Same thing as working cash in hand and not declaring. Government hasn't got enough staff to employ to check each individual and company if they are declaring their correct income.


Similarly, HA wouldn't go looking to tackle if the property has been sub-let unless people report it.


It's the matter of big IF you get caught and what are the consequences. What are the punishment or fines if there are any?

eddddy

agurung wrote: »

What are the punishment or fines if there are any?

The possible consequences are severe... but whether the parties involved would go that far is another question...

1) Breach of Lease - the lease could be forfeited (i.e. the OP loses their share of the flat, with no compensation).

2) Breach of Mortgage terms - the mortgage lender demands their money back immediately.

3) Inadequate insurance - building burns down and claim is rejected. If the building is a block of flats, the OP might then be liable for the cost of rebuilding the block. i.e. Millions of pounds.


Number 3 is the biggest risk - insurers do reject claims if policy terms aren't met.

Freeholders and Mortgage Lenders would probably give warnings etc before taking action (And court orders would probably be required).

ybx2011

Thanks for the advice so far, has anyone on here had specific experience with this, or know of any stories of people doing this? The process 'if' they find out is very unclear....it seems as though they would send you notice and request you serve notice to the tenants and move back in...not ideal but something I could live with.

My assumption (rightly, or wrongly) is that as long as the tenants aren't any trouble the housing association is unlikely to notice...they are pretty short staffed in my experience and don't really care as long as you pay them and don't cause bother!

I would try and find friends or colleagues to live in the property to try and minimize any issues.

kingstreet

eddddy wrote: »

Assuming the Freeholder is recharging Leaseholders for the insurance, Leaseholders have the legal right to inspect/copy the Freeholder's insurance policy.

The Freeholder commits an offence if they refuse, and is liable for a fine of up to £2,500 if they refuse.

Landlord and Tenant Act 1985. See para 2 - especially 2.(4)
http://www.legislation.gov.uk/ukpga/1985/70/schedule


Unless Shared Ownership has different rules.... does it?

Dunno.

As you say, the cost is included in the service charge but whether or not they supply policy documents to the share owner is difficult to say.

I guess the OP could always ask for one to see what the terms might be.

Blondetotty

I have a shared ownership property on the south coast which I sub let out to a relative.

I relocated from the south to the north where I currently rent but as I couldn't unload the ball and chain around my neck also known as my shared ownership flat I spoke to my HA who agreed I could sublet (subletting is not allowed in the terms of the lease I hold with them). They agreed in writing that they would allow this so I approached my mortgage company and changed my mortgage type (buy to let).


I'm paying slightly more in mortgage payments but my relative that moved in covers the mortgage and the rent so they get a below market value rented flat, I'm happy that the flat is being looked after as we're pretty close and both the HA and mortgage company are aware and okay with it. Obviously I had to sort things out like gas safety certs etc but didn't have to worry about deposits as I didn't take one. There are numerous other things that as a landlord, albeit a subletting one, you need to be aware of.


I have no doubt that most HA's wouldn't notice a flat that has been sublet without consent, I can't actually remember the last time that someone from ours visited the block but remember other residents will notice and you'll no doubt have someone that takes offence and will report it. If you're going to do it on the sly, which I don't recommend, you're setting yourself for potential problems. I'm sure if you approached the HA and mortgage company they'd be willing to listen to what you propose.

ybx2011

Thanks! Did you try to sell your property before speaking to the HA?

Blondetotty

Hi, no. I live in a small block of only 5 flats. Two had been for sale; one for nearly 18 months and the other for 2 years before they were sold so I didn't even bother attempting to market mine.