Rent and service charge increased before owning a Shared Ownership?

throwaway_lon

I've just started the process of buying a Shared Ownership flat through resales.



I've paid a £500 administration fee to the vendors estate agent which I'll receive back once I complete the purchase, or if the property gets downvalued and the purchase falls through (or the seller pulls out).


Last week I received a Memorandum of Sale with the figures for the sales price, service charge and ground rent, but today I was sent an updated one that are an extra £400 per year combined (12% increase to the service charge)



Do I have any recourse or negotiating room here? Obviously I knew they would increase, but I thought if the increase would be so soon it would be made clear. I've added some slack to my budget, but wasn't expecting an increase this high, or before I've even moved in.



I'm having second thoughts about the place due to all of the restrictions SO has and the fact I'm throwing thousands a year down the drain in fees, and as the increased cost is almost the same as just leaving it entirely it's not helping matters (nor is Brexit uncertainty, but that's another matter completely).



Any advice? Do I just lump it? I don't feel like I should be this uncertain about something that I'm going to have to live with for years and years...

rachel230

With a shared ownership you can expect for regular increases in service charge and rent. SO is a constant drain on your finances. At least you have been warned by seeing this increase before you are even through the door! Have you had the terms of the lease (that you will be legally bound by, fair or not) explained to you in detail. Restrictions? Permission fees? Ground rent increases? Any estate charges?

throwaway_lon

I haven't even seen the lease yet. It's not been shared with me though I've requested it. I was told it would be sent to my solicitor later - Can/should I push for it now?

HanPop

Try to get a copy of the lease and see how the rent increase is calculated. Which housing association is it? Mine was Bromford Homes and our increase wasn’t much at all.

jonnygee2

Service charges go up and down (usually up!) in accordance with whatever the maintenance costs have been.

A lot of things break = increase in service charge. Much like any property, but with a bit less control because you are leaseholder (or actually, as its shared ownership, you are a secure tenant of the leaseholder/freeholder).

Unsure of the specific legal position of a shared 'ownership' tenant, but generally if you are presented with a service charge you have to pay it.

HampshireH

Its the new financial year. Its when service charges are reviewed and applied.

It was to be expected. The owner has passed it on it very good time.