Shared Ownership Contract enquiries - can you see anything I have missed?

Articmonkey

Hello all, have been here before but my account expired so I'm new/old! I have sent the following email to my solicitor as I really don't want to be stung by SO at a later date. I have done loads of research and thought long and hard about it and it's my only house buying option as a lone parent of nearly 40. Please could you cast your eye and see if there's anything glaringly obvious I have missed? Thanks.


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Good Morning,





I have reviewed the preliminary report and leasehold contract and have a number of enquiries. I will set them out in the same format as the report for ease of reference;





Contract


You have stated in this section that I will pay the gross rent amount of £3848.62. Please note that the gross rent is based on the LA (the seller) owning 100% of the property. As I will own 50% I will pay a specified rent of £1924.31 as stated in the leasehold contract.





Deposit


You have stated I will pay a 10% deposit when contracts are exchanged. My lender (Halifax bank) has stated I need to pay a 15% deposit as the property is a new build.





Regarding the reservation fee – I have not paid a reservation fee. When I enquired re this with Craven Council (the seller) I was advised that there was no reservation fee to pay.





Completion


The completion date for the build of the property was left out. Was this intentional as you do not know the date?





Title Information


1. I would like specific clarification on the return of the property at sale and it’s decorative position. The contract states ‘workmanlike’ decoration returned as is – please could you clarify if the LA would want the property professionally redecorated if I end the shared ownership and if they require the decorating returned to original colours etc.


2. Please could you confirm with the seller that I would have to get written permission from them every time I decorate a room? I am not planning to make any external or internal structural changes to the property but I would like to decorate the property by painting walls, to maintain the property.


3. Where does it state in the leasehold contract that I can not have animals in the property? I could not find this in the leasehold contract. I would never have agreed to buy 50% of the property had this been made clear from the outset, as I have a tortoise.


4. Ground rent / service charge – please advise this asap so I can budget accordingly.


5. Buildings Insurance – will I be expected to contribute an amount towards the Buildings Insurance for the properties on Crossburn Close?





Staircasing





Please could you seek clarification on the following;


How soon can I propose staircasing on the property?


What is the minimum share at one time for staircasing? 5%/10%?


Which party is responsible for the valuation costs for staircasing? If it is split, at what proportion?


Which party is responsible for the marketing costs on resale of the property? Is it proportionate to the share in the property? E.g. If I own 50% of the property would I have to pay the full amount of remarketing costs?





Additional Costs





I am concerned that additional costs are being added frequently. Can you envisage any further additional costs to the;





£250.00 extra legal costs for new build property


£70.00 Title hard copy with land registry


£75.00 for the Cost and preparation of the lease and plans by the builder?





I will send a signed copy of the plot plans as requested by yourselves. Can I print, sign and then scan and return to yourselves via email or do you require a hardcopy to be posted to yourselves?





Sorry this is a lengthy list of enquiries, however I need clarification on these matters before I proceed.

kingstreet

You'll pay 10% for exchange, the remainder for completion. The lender's requirement is irrelevant in this context.

The rent, service charge, buildings insurance should have been set out on the Memorandum Of Sale provided to you and your solicitor.

Completion on a newbuild is "on notice" so the date will be added later.

ThePants999

You're wrong about the deposit. You've made the common mistake of conflating two different concepts of "deposit".

A mortgage deposit is the amount of the purchase price that is funded by you, with the mortgage providing the rest. Halifax have told you that they'll only lend 85% of the price of a new build, meaning you need a mortgage deposit of at least 15%.

The exchange deposit is a sum that is lodged with the seller's solicitor at exchange of contracts, the rest following at completion. The standard amount, which your solicitors have requested here, is 10%. So you need to send your solicitors 10% in advance of exchange, which they'll transfer to the seller's solicitor on exchange; you follow up with the other 5% in advance of completion, and the solicitor also "draws down" the 85% that Halifax are providing, and sends them both to the seller's solicitor on completion day.

davidmcn

We don't know what you've missed without seeing what you've already been told.

In relation to pets, even if there is a prohibition the reality is that nobody's going to kick you out for having a tortoise (unless it's a particularly aggressive or noisy one).

eddddy

Regarding the 'service charge' - it's not a fixed amount, it is your share of the bills. The lease cannot predict how much those bills will be. (Somebody might be prepared to make a rough guess for you - but it could be way off.)

You need to read the lease to determine what your service charge must cover.

e.g. If, say, 5 properties share a private roadway, private car park, large garden - the bills for maintenance/repairs of those things are likely to be relatively high, so your share is likely to be high.

Articmonkey

Thanks, I had no idea about the deposit exchange/completion thing. So 10% at exchange and then the 5%.
Nu
Re the service charge, the solicitor said in his preliminary report he was awaiting for service charge details. Don't think the memo of sale contained any info re ground rent, service charge etc.

Thanks all, really helped me there re the deposit issue.