Buying New Home Whilst Selling Shared Ownership

Shugmo

Hi,
I would appreciate anyone's help.

My situation:
I live in a shared ownership property, 51% owned with no mortgage.

I have an inheritance and, with a smallish mortgage, can afford to buy a freehold property that I like that is now on the market.

The estate agent told me to ask the housing association if this was allowed.
They have informed me that it is not, even though my intention is to put the shared ownership on the market within days of exchanging on the new property.

They tell me it will be against the terms of the lease and that the purchase of the new property will not complete due to this.

Does this all sound correct?
They couldn't tell me what will stop the new purchase completing.
They couldn't tell me what the penalty for breaking the lease contract would be, other than having to sell my share of the house, which I intend to do.

Hope that makes sense.

J

Mark_d

It sounds like it all depends on the particulars of your shared ownership contract however I can't see how or why they would stop you buying a freehold property

ResourcesShared

The Leasehold Advisory Service (LEASE) is a government-funded, independent advice service with a free, legal helpline. It might be worth giving them a ring. If they give you an opinion, in writing, that is different from your housing association, it would be difficult for your housing association to argue against it.
https://clients.lease-advice.org/#/

user1977

Shugmo said:

They tell me it will be against the terms of the lease 

Does this all sound correct?

We don't know, because we can't read your lease from here...presumably you can? Does it say what they claim it does?

Even if it does, they're not going to be able to enforce it in any practical means other than by evicting you, which would seem both immensely unlikely and time-consuming, so I can't see it matters for what you propose.

annetheman

I’m buying a house and selling my SO. I do know I am not allowed to have more than 1 property, per the SO rules I signed up to when I was approved by the govt Help to Buy agent. 

The purchaser of your SO will have to also be approved for the scheme. 

Maybe that’s what they mean when they say your onward purchase will be blocked from completion. Look around clause 3 of your lease, if it’s anything like mine!

user1977

annetheman said:

I’m buying a house and selling my SO. I do know I am not allowed to have more than 1 property, per the SO rules I signed up to when I was approved by the govt Help to Buy agent. 

The purchaser of your SO will have to also be approved for the scheme. 

Maybe that’s what they mean when they say your onward purchase will be blocked from completion.

But why would the HA want to block a sale to somebody who (presumably) would qualify?

silvercar

annetheman said:

I’m buying a house and selling my SO. I do know I am not allowed to have more than 1 property, per the SO rules I signed up to when I was approved by the govt Help to Buy agent. 

The purchaser of your SO will have to also be approved for the scheme. 

Maybe that’s what they mean when they say your onward purchase will be blocked from completion. Look around clause 3 of your lease, if it’s anything like mine!

So if they blocked the purchase of the SO that would force someone to own more than one property.

I doubt it’s an enforceable term, what would happen if someone inherited a property? Do they think they could then prevent the sale of the SO property?

Given their attitude so far, why would you tell them? You will need to tell your solicitor as you will be charged the higher SDLT that you can claim back if you sell your other property within 3(?) years.

aliby21

Shugmo said:

Hi,
I would appreciate anyone's help.

My situation:
I live in a shared ownership property, 51% owned with no mortgage.

I have an inheritance and, with a smallish mortgage, can afford to buy a freehold property that I like that is now on the market.

The estate agent told me to ask the housing association if this was allowed.
They have informed me that it is not, even though my intention is to put the shared ownership on the market within days of exchanging on the new property.

They tell me it will be against the terms of the lease and that the purchase of the new property will not complete due to this.

Does this all sound correct?
They couldn't tell me what will stop the new purchase completing.
They couldn't tell me what the penalty for breaking the lease contract would be, other than having to sell my share of the house, which I intend to do.

Hope that makes sense.

J

I wonder if this is the problem?  Why are you waiting till you exchange on your new property before you list your current shared ownership property?  Doing it this way you are trying to buy a new property while still owning a shared ownership.

annetheman

user1977 said:

annetheman said:

I’m buying a house and selling my SO. I do know I am not allowed to have more than 1 property, per the SO rules I signed up to when I was approved by the govt Help to Buy agent. 

The purchaser of your SO will have to also be approved for the scheme. 

Maybe that’s what they mean when they say your onward purchase will be blocked from completion.

But why would the HA want to block a sale to somebody who (presumably) would qualify?

silvercar said:

annetheman said:

I’m buying a house and selling my SO. I do know I am not allowed to have more than 1 property, per the SO rules I signed up to when I was approved by the govt Help to Buy agent. 

The purchaser of your SO will have to also be approved for the scheme. 

Maybe that’s what they mean when they say your onward purchase will be blocked from completion. Look around clause 3 of your lease, if it’s anything like mine!

So if they blocked the purchase of the SO that would force someone to own more than one property.

I doubt it’s an enforceable term, what would happen if someone inherited a property? Do they think they could then prevent the sale of the SO property?

Given their attitude so far, why would you tell them? You will need to tell your solicitor as you will be charged the higher SDLT that you can claim back if you sell your other property within 3(?) years.

The covenant restricts the person who is selling their current SO property to complete the purchase of another property before surrending the current SO property, so you can not have a SO property and another property, or as it describes in the lease 'no exchange of contracts or completion shall take place within such period before the surrender of the whole assigned Premises by the Leaseholder' -- in my lease it is in clause 3; might be similar for the other person.

Regarding inheritance, it goes on in the same clause:

Where this Lease is assigned: 
(q) under a will or intestacy; (b) under Section 24 or 24A of the Matrimonial Cuases Act 1973 or Section 2 of the Inheritance (Provisions for Family and Dependents) Act 1975; (c)... etc etc etc etc ...the provisions of Clause 3.19.1 to 3.19.3 will not apply

basically it outlines specific cases where this can be allowed.

Shugmo

aliby21 said:

Shugmo said:

Hi,
I would appreciate anyone's help.

My situation:
I live in a shared ownership property, 51% owned with no mortgage.

I have an inheritance and, with a smallish mortgage, can afford to buy a freehold property that I like that is now on the market.

The estate agent told me to ask the housing association if this was allowed.
They have informed me that it is not, even though my intention is to put the shared ownership on the market within days of exchanging on the new property.

They tell me it will be against the terms of the lease and that the purchase of the new property will not complete due to this.

Does this all sound correct?
They couldn't tell me what will stop the new purchase completing.
They couldn't tell me what the penalty for breaking the lease contract would be, other than having to sell my share of the house, which I intend to do.

Hope that makes sense.

J

I wonder if this is the problem?  Why are you waiting till you exchange on your new property before you list your current shared ownership property?  Doing it this way you are trying to buy a new property while still owning a shared ownership.

I have found a property I like, which is rare for the area I love in.
Selling the SO property is a long process and I am in the position to move quickly due to availability of funds.
The new property needs a bit of work so it would afford me time to do this whilst mine is in the process of selling.
I could move everything myself without hiring a removals company.

doby1515

Would be curious to know what happened in the end?

 I am in a similar position and having read through the lease I cannot find any clause which suggests I cannot own both SO and another property.