Right-To-Buy 5 Years up and yet cannot get Equity - Restriction Question

daryladvice

Hello everyone, so recently my property passed the 5 years period for which my property cannot be sold within this time otherwise it would fall in the following category.

"You'll have to pay back some or all of the discount you got if you sell your Right to Buy a home within 5 years of buying it. You'll have to pay back all of the discounts if you sell within the first year. After that, the total amount you pay back reduces to 80% of the discount in the second year."

This is not the issue that's persisting however, I recently looked into releasing some money via equity and found that there was a further restriction on the property that stated:

RESTRICTION: No transfer or lease of the registered estate dated before 16 January 2028 by the proprietor of the registered estate or by the proprietor of any registered charge is to be completed by registration unless accompanied by.

Now the equity was ready to be paid but they denied paying out due to this last restriction. Yet this restriction seems to me, to be in relation to selling the property and not releasing funds via equity.

I am wondering if is this just a lender issue if they see this as an issue and or can this restriction be removed due to the fact the property has been bought out right. It was bought out right 5 years ago in cash.

If anyone could inform me of whether the property restriction can be removed now it's out of the 5 years and fully paid for or whether this really does stand for a further 5 years until 2028?

Thank you for any help you may be able to give. 

Daryl

housebuyer143

I believe you are required to offer it back to the council if you dispose of the asset within 10 years. Potentially they see the release of equity through this scheme as a disposal. 
I would speak to the council regarding this as it would only be them who could agree to remove this restriction.

propertyrental

daryladvice said:

.....

RESTRICTION: No transfer or lease of the registered estate dated before 16 January 2028 by the proprietor of the registered estate or by the proprietor of any registered charge is to be completed by registration unless accompanied by.

....... Yet this restriction seems to me, to be in relation to selling the property and not releasing funds via equity.

Yes..................................

daryladvice

housebuyer143 said:

I believe you are required to offer it back to the council if you dispose of the asset within 10 years. Potentially they see the release of equity through this scheme as a disposal. 
I would speak to the council regarding this as it would only be them who could agree to remove this restriction.

Thanks for the reply

Having spoken with them it seems they tell me this cannot be removed and yet I do keep hearing that others may have been able to remove this restriction or lessen the years. Do you happen to know of a solution that could be done, maybe a solicitor could force that change?

daryladvice

propertyrental said:

daryladvice said:

.....

RESTRICTION: No transfer or lease of the registered estate dated before 16 January 2028 by the proprietor of the registered estate or by the proprietor of any registered charge is to be completed by registration unless accompanied by.

....... Yet this restriction seems to me, to be in relation to selling the property and not releasing funds via equity.

Yes..................................

It seems that I keep hearing some say equity can be released and restriction removed and others say it cannot be removed. Is it I am dealing with actually unable to remove the restriction or that I would or could use a solicitor to remove it via legal methods?

housebuyer143

daryladvice said:

propertyrental said:

daryladvice said:

.....

RESTRICTION: No transfer or lease of the registered estate dated before 16 January 2028 by the proprietor of the registered estate or by the proprietor of any registered charge is to be completed by registration unless accompanied by.

....... Yet this restriction seems to me, to be in relation to selling the property and not releasing funds via equity.

Yes..................................

It seems that I keep hearing some say equity can be released and restriction removed and others say it cannot be removed. Is it I am dealing with actually unable to remove the restriction or that I would or could use a solicitor to remove it via legal methods?

Are you releasing some equity so you are still the legal registered owner, or are you releasing as much as you can and giving up ownership?

housebuyer143

@Land_Registry can you help?

Land_Registry

housebuyer143 said:

@Land_Registry can you help?

To some extent but remember we register outcomes so are not always privy to the legal/conveyancing perplexities involved
From a purely registration perspective the wording of the restriction is key. It states no transfer or lease so if you are trying to do one of those then it bites. 

As for you trying to cancel it then you’d need to apply and provide supporting evidence to back up the cancellation. That’s where your legal advice clicks in. 

Any application to withdraw would be by the restriction’s beneficiary.And any application to cancel would invariably involve our contacting them so the ‘accompanied by’ is also important. 

To understand what’s possible you need to consider the terms of the discount purchase and how the interest protected by the restriction came about. And crucially how it ends. 

daryladvice

Land_Registry said:

housebuyer143 said:

@Land_Registry can you help?

To some extent but remember we register outcomes so are not always privy to the legal/conveyancing perplexities involved
From a purely registration perspective the wording of the restriction is key. It states no transfer or lease so if you are trying to do one of those then it bites. 

As for you trying to cancel it then you’d need to apply and provide supporting evidence to back up the cancellation. That’s where your legal advice clicks in. 

Any application to withdraw would be by the restriction’s beneficiary.And any application to cancel would invariably involve our contacting them so the ‘accompanied by’ is also important. 

To understand what’s possible you need to consider the terms of the discount purchase and how the interest protected by the restriction came about. And crucially how it ends. 

Hi there, thanks for the reply.

Equity really was to just release a small portion of the property price. It's valued at around £190,000 and the equity is £28,000. There is no wish to sell or give up the property, it is just to raise some funds in and out of the house price now that 5 years have passed. The wish is to remain in complete ownership of the property, with no change to this.

I was wondering if removing the next 5 years of restriction was possible without any form of implications for doing so and if that is even possible?

Could you tell me more about this, please? "And any application to cancel would invariably involve our contacting them so the ‘accompanied by’ is also important" Does this mean you are able to contact them and enforce a possible removal of restriction?

I was under the impression that the discount only applied for the first 5 years, which has now elapsed since January this year. I am finding it hard to understand why the previous council have any say so on a property that is now fully bought outright.

If you could advise further on this that would be much appreciated, thank you.

daryladvice

housebuyer143 said:

daryladvice said:

propertyrental said:

daryladvice said:

.....

RESTRICTION: No transfer or lease of the registered estate dated before 16 January 2028 by the proprietor of the registered estate or by the proprietor of any registered charge is to be completed by registration unless accompanied by.

....... Yet this restriction seems to me, to be in relation to selling the property and not releasing funds via equity.

Yes..................................

It seems that I keep hearing some say equity can be released and restriction removed and others say it cannot be removed. Is it I am dealing with actually unable to remove the restriction or that I would or could use a solicitor to remove it via legal methods?

Are you releasing some equity so you are still the legal registered owner, or are you releasing as much as you can and giving up ownership?

Releasing equity so I remain the legal registered owner, no change to this. Just releasing a partial amount from the property value, I mentioned in a reply above, the property is worth £190,000 equity would be £28,000.

If you could advise further that again would be appreciated thanks.

housebuyer143

daryladvice said:

housebuyer143 said:

daryladvice said:

propertyrental said:

daryladvice said:

.....

RESTRICTION: No transfer or lease of the registered estate dated before 16 January 2028 by the proprietor of the registered estate or by the proprietor of any registered charge is to be completed by registration unless accompanied by.

....... Yet this restriction seems to me, to be in relation to selling the property and not releasing funds via equity.

Yes..................................

It seems that I keep hearing some say equity can be released and restriction removed and others say it cannot be removed. Is it I am dealing with actually unable to remove the restriction or that I would or could use a solicitor to remove it via legal methods?

Are you releasing some equity so you are still the legal registered owner, or are you releasing as much as you can and giving up ownership?

Releasing equity so I remain the legal registered owner, no change to this. Just releasing a partial amount from the property value, I mentioned in a reply above, the property is worth £190,000 equity would be £28,000.

If you could advise further that again would be appreciated thanks.

The land registry process the forms so they can't help you with your quest to get it removed unfortunately, that's outside their remit.
As with how I understand other restrictions to work you can't just get them removed without the permission of the person who put it there (obviously this is dependent on the restriction type).
Now it might be that the solicitor or the equity release company are confused by the restrictions wording (which wouldn't be the first time) and are interpreting it incorrectly.  

The RTB scheme restricts your ownership for 10 years which is why you are having this problem. I wouldn't spent my time trying to get it removed because I think that's not going to happen as it's meant to be there, it's not an error. You maybe need to focus more on getting the council to agree to you proceeding with the equity release, as subject to the lawyers understanding the restriction and interpreting it correctly, this is probably the only way to proceed within in the next 5 years.