Right to Buy - disposal of part of house

Ed-1

How would a disposal of part of a house work when considering repayment of discount and the council's first right of refusal?

A disposal of part of a house is a relevant disposal:
https://www.legislation.gov.uk/ukpga/1985/68/section/38

So if you owned a house and were selling 50% of the house, would you have to offer that 50% to the council? And how would the discount repayment be calculated if it's within the first 5 years?

user1977

Can you clarify what you mean by "selling 50% of the house"?

Ed-1

user1977 said:

Can you clarify what you mean by "selling 50% of the house"?

Retaining a 50% share of the ownership so someone else (family member) would then own the property jointly with a joint mortgage.

Norman_Castle

38 Relevant disposals.

(1)A disposal, whether of the whole of part of the house, is a relevant disposal for the purposes of this Part if it is—

(a)a conveyance of the freehold or an assignment of the lease, or
(b)the grant of a lease of sub-lease (other than a mortgage term) for a term of more than 21 years otherwise than at a rack rent.

I'd suspect its treated as selling the whole property and considered a "relevant disposal" with regard to repayment and first refusal. 

https://www.ownyourhome.gov.uk/scheme/right-to-buy/contact-an-agent/

Ed-1

Norman_Castle said:

38 Relevant disposals.

(1)A disposal, whether of the whole of part of the house, is a relevant disposal for the purposes of this Part if it is—

(a)a conveyance of the freehold or an assignment of the lease, or
(b)the grant of a lease of sub-lease (other than a mortgage term) for a term of more than 21 years otherwise than at a rack rent.

I'd suspect its treated as selling the whole property and considered a "relevant disposal" with regard to repayment and first refusal. 

https://www.ownyourhome.gov.uk/scheme/right-to-buy/contact-an-agent/

i.e. you can't sell part of a house without offering the whole house to the council first?

user1977

Ed-1 said:

user1977 said:

Can you clarify what you mean by "selling 50% of the house"?

Retaining a 50% share of the ownership so someone else (family member) would then own the property jointly with a joint mortgage.

Ok, so not sawing the house down the middle...is the family member "a member of the family of [the current owner] and has resided with him throughout the period of twelve months ending with the disposal"? (or the owner's spouse/civil partner?)

If so then it's exempt under the next section:
https://www.legislation.gov.uk/ukpga/1985/68/section/39

Norman_Castle

Ed-1 said:

Norman_Castle said:

38 Relevant disposals.

(1)A disposal, whether of the whole of part of the house, is a relevant disposal for the purposes of this Part if it is—

(a)a conveyance of the freehold or an assignment of the lease, or
(b)the grant of a lease of sub-lease (other than a mortgage term) for a term of more than 21 years otherwise than at a rack rent.

I'd suspect its treated as selling the whole property and considered a "relevant disposal" with regard to repayment and first refusal. 

https://www.ownyourhome.gov.uk/scheme/right-to-buy/contact-an-agent/

i.e. you can't sell part of a house without offering the whole house to the council first?

"A disposal, whether of the whole of part of the house, is a relevant disposal for the purposes of this"

This seems to state the sale of the whole or part of a house is considered equally.

Ed-1

user1977 said:

Ed-1 said:

user1977 said:

Can you clarify what you mean by "selling 50% of the house"?

Retaining a 50% share of the ownership so someone else (family member) would then own the property jointly with a joint mortgage.

Ok, so not sawing the house down the middle...is the family member "a member of the family of [the current owner] and has resided with him throughout the period of twelve months ending with the disposal"? (or the owner's spouse/civil partner?)

If so then it's exempt under the next section:
https://www.legislation.gov.uk/ukpga/1985/68/section/39

No - they haven't lived there (the house is currently rented out) but in any case, that says it needs to be a disposal of the whole house, not part. Does this mean that the whole house would need to be transferred into the ownership of the family member (who has to have lived there for 12 months) through a conveyance?

user1977

Ed-1 said:

user1977 said:

Ed-1 said:

user1977 said:

Can you clarify what you mean by "selling 50% of the house"?

Retaining a 50% share of the ownership so someone else (family member) would then own the property jointly with a joint mortgage.

Ok, so not sawing the house down the middle...is the family member "a member of the family of [the current owner] and has resided with him throughout the period of twelve months ending with the disposal"? (or the owner's spouse/civil partner?)

If so then it's exempt under the next section:
https://www.legislation.gov.uk/ukpga/1985/68/section/39

No - they haven't lived there (the house is currently rented out) but in any case, that says it needs to be a disposal of the whole house, not part. Does this mean that the whole house would need to be transferred into the ownership of the family member (who has to have lived there for 12 months) through a conveyance?

It needs to be a disposal of the whole house, but note that the current owner is also a qualifying person for the purposes of that section, so a disposal by them of the whole house to themselves and the new owner would (if the new person qualified...) be exempt. But if the new owner doesn't live there then it's academic, it will be treated in the same way as a normal sale.

Ed-1

user1977 said:

Ed-1 said:

user1977 said:

Ed-1 said:

user1977 said:

Can you clarify what you mean by "selling 50% of the house"?

Retaining a 50% share of the ownership so someone else (family member) would then own the property jointly with a joint mortgage.

Ok, so not sawing the house down the middle...is the family member "a member of the family of [the current owner] and has resided with him throughout the period of twelve months ending with the disposal"? (or the owner's spouse/civil partner?)

If so then it's exempt under the next section:
https://www.legislation.gov.uk/ukpga/1985/68/section/39

No - they haven't lived there (the house is currently rented out) but in any case, that says it needs to be a disposal of the whole house, not part. Does this mean that the whole house would need to be transferred into the ownership of the family member (who has to have lived there for 12 months) through a conveyance?

It needs to be a disposal of the whole house, but note that the current owner is also a qualifying person for the purposes of that section, so a disposal by them of the whole house to themselves and the new owner would (if the new person qualified...) be exempt. But if the new owner doesn't live there then it's academic, it will be treated in the same way as a normal sale.

To be a qualifying person the legislation states that the family member must have resided with the person who is disposing the property for the previous 12 months. But can they have been living together at any property, not just the one being disposed?

Norman_Castle

Ed-1 said:

user1977 said:

Ed-1 said:

user1977 said:

Ed-1 said:

user1977 said:

Can you clarify what you mean by "selling 50% of the house"?

Retaining a 50% share of the ownership so someone else (family member) would then own the property jointly with a joint mortgage.

Ok, so not sawing the house down the middle...is the family member "a member of the family of [the current owner] and has resided with him throughout the period of twelve months ending with the disposal"? (or the owner's spouse/civil partner?)

If so then it's exempt under the next section:
https://www.legislation.gov.uk/ukpga/1985/68/section/39

No - they haven't lived there (the house is currently rented out) but in any case, that says it needs to be a disposal of the whole house, not part. Does this mean that the whole house would need to be transferred into the ownership of the family member (who has to have lived there for 12 months) through a conveyance?

It needs to be a disposal of the whole house, but note that the current owner is also a qualifying person for the purposes of that section, so a disposal by them of the whole house to themselves and the new owner would (if the new person qualified...) be exempt. But if the new owner doesn't live there then it's academic, it will be treated in the same way as a normal sale.

To be a qualifying person the legislation states that the family member must have resided with the person who is disposing the property for the previous 12 months. But can they have been living together at any property, not just the one being disposed?

I'd suspect the expectation is to have to have resided at that property although if the legislation isn't clear it could be argued they have resided together and therefore qualify.