Right of First Refusal - should I wait until May 2022 to sell on open market?

montymouse

Hi

In 1996 I moved into a lovely council maisonette. Some time later the local council housing ceased being council and came under a district housing association. In 2012, due to a change in circumstances I bought the maisonette, completing in May 2012. Since then, the block has become somewhat untidier. I would say that the block tends to be a mix of long standing council tenants who like to keep the place in good order, and younger tenants who seem more messy and perhaps a bit less community minded. Back when I moved in, everybody had their own dustbin, and the place was clean and tidy, but now there is a communal bin and recycling area which is a total mess, and my maisonette is right next to it! It is a one off council block (actually two small blocks) in a reasonable residential area, and not on an estate. It is on a main road ten minutes walk from town and close to the hospital. There is a good bus service from outside the block, and the town is close to major motorways. The row that my maisonette is on are all good, long standing tenants with a sense of community. Being one floor up we are above the main road and look out onto the woodland and nice bungalows on the other side of the road. The bedsits are down below and people seem to come and go.

Anyway, my mother has recently moved into a flat in a sheltered housing block, so my partner and I have moved into Mum's house, which has been in our family for decades. I am now looking to sell the maisonette, but will not have owned it for ten years until  May 2022 (ten months time). The maisonette has a new kitchen and bathroom, which we put in originally for ourselves, before we realised we were moving. To prepare the property for market we put in a new boiler, and had it redecorated. We made the mistake of assuming that because we have owned it for more than five years, we can sell on the open market - wrong! ( I really must learn to read). I found out yesterday that five years ownership means that I do not have to pay back any of the discount I was allowed in buying it, however, under ten years I have to offer the district housing association "First Refusal". They seem to have only just realised this themselves, hence the phone call I received yesterday. I had already made an appointment for their surveyor to come and take a look on Friday, and for their designated estate agent to come and do an independent evaluation in early August. The housing assoc said to me some time ago, when I was mooting selling, that if they bought it back they might have to take out our nice kitchen and bathroom to "restore it to standard", so I feel that if I do sell it to them I will not get the full value of the property.

Because I am just under the ten years they have now asked me to draft out a letter offering the property back to them for sale. I am very loath to do this as, if I understand correctly, it then leaves me open to having to take the price that they offer. The rules say they have to offer me "market price", but I know from experience that ideas of what "market price" is are inclined to differ, with people tending to pick a "market price" that fits their own interests.

So the question is this: do I rent it out for a year and then sell? Problem is, if bad tenants make a mess of the place, all the good work that myself and my partner have done will have to be redone, do I might actually be no better off. We don't fancy the idea of just leaving it empty for ten months. Should I just go along with the under-ten-years procedure and risk a low offer, but get it off my hands? Can I refuse any offer the housing assoc make if it is not what I consider to be the worth of the property? Should I speak to my solicitor?

A few years ago when we were thinking about selling we got a local estate agent in to have a look, and he seemed to suggest that, because of the condition of the block, it would not be easy to get "professional" tenants in. There is a general hospital nearby where I think there are people working who want temp accommodation.

Thanks for reading and I am glad of any opinions.

Chandler85

First Refusal, does not mean you have to sell it them for cheaper then market value.  Nor to getting them to survey it and make an offer on it mean you have to sell it to them or anyone at all.  You could change your mind and wait a year or 10 months if you wanted or never sell at all.

Get them out, get a price from them, the idea of the surveyor etc is to give a proper independent valuation like a mortgage company would.  So the offer is fairer (though maybe lower then someone in a hyped market would pay).

AdrianC

Can you let it? Or would that also be restricted under the RtB rules...?

Do you actually want to run a residential lettings business? Do you have the first inkling of the complexities and legal requirements?

What do the rules say about the definition of market value?

montymouse

Chandler85 said:

First Refusal, does not mean you have to sell it them for cheaper then market value.  Nor to getting them to survey it and make an offer on it mean you have to sell it to them or anyone at all.  You could change your mind and wait a year or 10 months if you wanted or never sell at all.

Get them out, get a price from them, the idea of the surveyor etc is to give a proper independent valuation like a mortgage company would.  So the offer is fairer (though maybe lower then someone in a hyped market would pay).

Yes, that's how I would like it to be. But I had a phone call yesterday saying that I had to write a formal letter to them saying that I wish to sell the property. I am worried that writing such a letter leaves me open to being legally obliged to accept their offer. I am happy for them to make me an offer, but then I want to be able to reject or accept as appropriate.

montymouse

AdrianC said:

Can you let it? Or would that also be restricted under the RtB rules...?

Do you actually want to run a residential lettings business? Do you have the first inkling of the complexities and legal requirements?

What do the rules say about the definition of market value?

Yes, I actually could let it under the rules. I would most likely go through a lettings agency. However, I don't particulary relish letting a property out, as I know of some of the problems that can be involved in doing this.

GDB2222

Hi Council, I'm thinking of putting my maisonette on the market. Do you want to look at it first?

Would that do the trick?  

If they want a specific wording, they should send you a draft, and you can post it here.

I have no idea what the lease says, but often it means that you can find a buyer and the council can buy at the same price.

montymouse

GDB2222 said:

Hi Council, I'm thinking of putting my maisonette on the market. Do you want to look at it first?

Would that do the trick?  

If they want a specific wording, they should send you a draft, and you can post it here.

I have no idea what the lease says, but often it means that you can find a buyer and the council can buy at the same price.

Yes, if I word the letter appropriately, it doesn't tie me into anything.

I do actually already have an interested buyer, apparently. One of the neighbours says that her friend is interested. Might not really materialise though.

sammyjammy

I don't see the problem?  If they offer a price you find unacceptable then just tell them you aren't selling it, bear in mind though that your buyers will be limited somewhat on the open market due to it being a flat/ex local authority and you'll most likely only get interest from buy to let landlords who will also want to buy it at a cut price.

Pok3mon

We was one year off first refusal after we had right to buy, We sent a letter to housing department stating our intentions to sell and offering first refusal as per right to buy rules. 

had a letter within the week saying no thank you. However councils have been known to buy back 4+ bedroom old stock happened to my neighbor as it was 4 bed and council had a shortage. Sold it at market value and no agent fees.

NameUnavailable

I would think the idea of selling it back to the HA is wonderful. They will pay you market value (which you can compare with your own surveyors valuation if you wish) and you avoid potential time wasters and most of all, you won't be paying agents fees!

ssparks2003

Find out the market value by getting 3 valuations, work out the middle figure and offer it to the council on a take it or leve it basis, what's the problem