Council Right of First Refusal

Mr_Big

I'll keep this brief.

House bought under right to buy scheme. Tried to do a transfer of ownership between family members due to financial issues. Transfer couldn't be done. We're now considering just offering the council right of first refusal in hope they will reject the offer so we can transfer the mortgage over that way instead. Now, local solicitors have advised as far as they are aware, our council aren't really buying properties right now, however I spoke with the council who said they are still considering buying properties back. They also mentioned that if they do exercise right of first refusal, there's no going back from there. Can they really do that? Is it safe to offer them right of first refusal and if they say they intend to buy the property we can cancel the sale and keep the mortgage/property? We're not trying to sell the house, just change the owner of ownership the property between family members.

Any advice appreciated, thanks.

silvercar

If you sign "exchange contracts" with the council then you are obliged to complete. Until that point you can walk away.

Changing ownership is effectively a sale, even if the parties are related. legal fees need to be paid, any mortgage needs to be redeemed and the new owner take out their own mortgage, stamp duty may be due, discounts on purchase of council property may be clawed back.

Don't think of this as just a paper exercise.

tacpot12

I don't think they can force you to sell if you offer them first refusal; you don't know whether they will offer you a fair market price yet. If they offer you a fair price, and you don't want to accept, just tell them it's not enough and repeat until they offer you so much money you can buy a property outright.

David_Evans

When you write to the council, you need to put ''without prejudice'' at the top of your letter.

G_M

David_Evans wrote: »

When you write to the council, you need to put ''without prejudice'' at the top of your letter.

What bit of dubious law you've read somewhere makesyou think this?

'Without Prejudice' does have a place in certain legalletters/documents, but not in this instance.

They also mentioned that if they do exercise right of first refusal, there's no going back from there. Can they really do that? Is it safe to offer them right of first refusal and if they say they intend to buy the property we can cancel the sale and keep the mortgage/property?

Why not get the answer fro the horse's mouth? I googled 'council right of first refusal' and the first link was to a council website. I'm sure all councils will have similar explanations:

If we decide to accept your offer
If we decide to accept your offer we must issue a formal acceptance notice letting you know that we wish to accept the offer ourselves (or alternatively that we are nominating another landlord approved under the government's regulations to accept the offer in our place).
We will only tell you that we have nominated to another landlord if they have given us a written commitment that they want to be nominated. Please remember that until a binding contract has been entered into, acceptance of your offer by us, or a landlord nominated by us, does not entitle you to insist on a purchase being carried out.

http://www.welhat.gov.uk/housing/first-refusal


or from the leglislation:
https://www.legislation.gov.uk/uksi/2005/1917/made

Acceptance notices

6.—(1) Where the recipient of an offer notice wishes to accept the offer, it must do so within the period of 8 weeks beginning with the date of receipt of the notice.

(2) Acceptance of an offer must be by acceptance notice, in which the recipient of the offer notice must either—

(a)itself accept the offer; or

(b)nominate another person to accept the offer in accordance with regulation 8.

(3) The service of an acceptance notice by any person entitled to do so shall not confer any right on the owner of the property to require that person to purchase the property unless and until that person enters into a binding contract for sale in accordance with regulation 10.

Norman_Castle

tacpot12 wrote: »

you don't know whether they will offer you a fair market price yet.

They have to pay the fair market price. It will be valued independently.

David_Evans

Norman_Castle wrote: »

They have to pay the fair market price. It will be valued independently.

And if not happy, you can appeal to the 'District Valuer' etc.

unforeseen

And why do you think that they will allow you to stay? Vacant possession is the norm.

CarrieVS

G_M wrote: »

I googled 'council right of first refusal' and the first link was to a council website. I'm sure all councils will have similar explanations
...

The passages you quoted there both make clear that if the council make an offer, it's not binding on them - if the council decide to back out the homeowner can't insist on going through with the sale.

OP has the opposite question if I read them correctly - they want to know whether they can pull out and keep the house (obviously they can't sell to anyone else if the council want it.) I can't see where the bits you quote address that at all.

G_M

CarrieVS wrote: »

The passages you quoted there both make clear that if the council make an offer, it's not binding on them - if the council decide to back out the homeowner can't insist on going through with the sale.

OP has the opposite question if I read them correctly - they want to know whether they can pull out and keep the house (obviously they can't sell to anyone else if the council want it.) I can't see where the bits you quote address that at all.

Hmmm... you may be right. :T


Though reference to "until that person enters into a binding contract for sale" accords with standard conveyancing practice (Exchange of Contracts) under which neither party is bound until Exchange (or if I'm right, 'a binding contract' is enteerd into.)

But someone who's been through the process or works in the area may know better.

Norman_Castle

OP, Contact them again and ask specifically, if you offer it to them as required will you be forced to complete the sale. Its likely you spoke to someone who doesn't know the answer or who misunderstood your question.


https://righttobuy.gov.uk/help/