Completion statement query - any maths gurus can help?

annetheman

Hi all,

I'm calculating my potential move costs and have helpfully received costs incurred to date from solicitor. I have an accurate picture of the amount I'll need to hand over before completion.

I do also expect that I will be paid back an apportioned amount of rent and service charge from my housing association (it's shared ownership) for that month - I am not sure when is it likely this will be paid, but assumed it might be calculated by my solicitor before completion and then paid by the HA as a deposit later in the month when they close my account.

So maths isn't my strong suit but I have tried to work out what I would get back; I pay the below every month for the month in advance:

Mortgage [28th]	£ 436.25
Rent [1st]	£ 722.15
Service Charge [1st]	£ 127.11

I will hopefully complete on the 23rd August. How much can I expect back from them? I calculated:

Rent = £23.29 per day. 8 days remaining = £186.32 rent back.
Service Charge = £4.10 per day. 8 days remaining = £32.80 service charge back.

= £219.12 total back from HA upon account close.

Is this about right?

Thanks for any help!

Hoenir

annetheman said:

I do also expect that I will be paid back an apportioned amount of rent and service charge from my housing association (it's shared ownership) for that month - I am not sure when is it likely this will be paid, but assumed it might be calculated by my solicitor before completion and then paid by the HA as a deposit later in the month when they close my account.

Completion statement will be based on the funds required at the time to allow the solicitor effect the transaction and meet any outstanding liabiilities. There'll be no second guessing of matters which won't be resolved on the day. Any refunds due will follow at a later date. 

propertyrental

Do the payment dates reflect the periods from which hey start ie does mortgage payment cover 28th to 27th of the month?

DE_612183

The date the payment is made does not necessarily reflect the dates the payment covers - for example your mortgage payment is probably for 1st to 31st of month ( also it's adjusted based on 365 days as well so you need to take that into account ).

Are the charges for the same property - ie you pay rent mortgage and service for the same property?

Normally you wouldn't get back anything from a mortgage as the payment just reduces the capital outstanding - so you have less to pay.

Perhaps if you give more info about what you are moving from and where you are going it might make it easier to understand ( also values of sale & mortgage ). 

saajan_12

Mortgage - you don't usually get this back, the redemption statement would outline what the balance is after your last payment, plus any interest accrued. You'd get back the sale price (of your owned share) less this balance. So the payment isn't returned, but it's counted and effectively increases your equity. 

Rent - depends on what their policy and agreement is - normally you can't subdivide rent payments but there may be a specific allowance for HA shared ownership properties. 

Service charge - depends on what is agreed in the sale, not just for the latest payment but also for any charges that arise later. Usually the service charge is £x for the year based on estimates, which they may divide up into 12. Then after the year is over, they check the actual receipts and if higher or lower then they might make a payment afterwards. In a sale, you would agree (via solicitors) whether a retention will be held, or the amount apportioned, or just a clean break (if the amounts are small and its more work to sort out). Ask your solicitor. 

annetheman

propertyrental said:

Do the payment dates reflect the periods from which hey start ie does mortgage payment cover 28th to 27th of the month?

I thought that might be the case because on my rent and service charge statement is breaks it up into periods dating from 1-31st or 1-30th or 1-28th (February). That's why I've assumed in the calculation if I complete on the 23rd, there will be 8 days remaining in that period. I will ask my HA though, to be sure!

I think including the mortgage was confusing, sorry  - I'm not expecting this back - I'm just calculating what I'll get from the HA. Please ignore it there and wasn't included in the calculation.

DE_612183 said:

Are the charges for the same property - ie you pay rent mortgage and service for the same property?

Perhaps if you give more info about what you are moving from and where you are going it might make it easier to understand ( also values of sale & mortgage ). 

Yes it's the same property. Moving from a shared ownership leasehold to a freehold. I've got an accurate statement from the solicitor so I'm happy I'm clear on what is coming back and transferring to the sale - they've laid it out really clearly. Perhaps my question was confusing, sorry - I am just trying to work out the apportionment of rent and service charge for the shared ownership, rather than the completion statement.

When I bought in 2020, the solicitor (same ones, actually) worked out my apportioned rent and SC for the month and then I paid it with my completion statement. So I'm assuming it'll work the same way but not sure and also not sure if my maths would be right if it did...

Hoenir

annetheman said:

When I bought in 2020, the solicitor (same ones, actually) worked out my apportioned rent and SC for the month and then I paid it with my completion statement. So I'm assuming it'll work the same way but not sure and also not sure if my maths would be right if it did...

Now it's the otherway round. Except the refund won't be available on completion. Will follow at  later date. 

annetheman

Hoenir said:

annetheman said:

When I bought in 2020, the solicitor (same ones, actually) worked out my apportioned rent and SC for the month and then I paid it with my completion statement. So I'm assuming it'll work the same way but not sure and also not sure if my maths would be right if it did...

Now it's the otherway round. Except the refund won't be available on completion. Will follow at  later date. 

Thank you, assumed that might be the case - the HA said "on account close" and they also outlined steps required within 2 weeks of completion to help them set up the new Shared Owner (basically my buyer's solicitor needs to send the HA their bank details and then buyer needs to set up an account on their portal) and close my account.

I'm also assuming as an aside that my buyer's solicitor will also be responsible for working out their approprtioned rent and SC for the month, as mine did.

If the account close happens when all the above is done; if it happens at roughly 2 weeks post completion, is my maths right on calculating what I will be sent back, do you think?