Buying a property at 100% from a seller who is on shared ownership scheme

FrenchPinkLady

Hello everyone, 
I am in the process of purchasing a flat at 100% but the person who owns it is in a shared ownership scheme. They will staircase to 100% to be able to sell me the property in full.
Obviously they have a shared ownership lease but the clauses of the lease are extremely restricted (no alteration, no pets without prior consent, no right to own another property in the UK or abroad).
I've been told that in this case, they only transfer the existing leasehold to the new buyer (it's basically just a change of name).
How is it possible when it's 2 different situations? Anyone has been in this case before? Any advice on how it works would be really great. Thank you in advance for your help! 

teaselMay

There may still be some restrictions once you've bought as it will still be a leasehold flat by the sounds of it.

The most important thing though is that surely until the current owner has "staircased" to 100% they only have their current share to sell and if they sell they have to sell it, at the moment, as a shared ownership home.

I think they need  to buy the rest of the shares before anything else can be considered.

(I'm not expert on this, I'm currently trying to buy a share of a new build shared ownership house)

TeaBee72

Yeah as above.

the current situation is the currnt occupant has two ‘seperate’ relationships.
1. joint ownership with the housing association ( for which rent is paid for their share )
2. Leaseholder for the use of the land/building (if a flat) for which service charges are paid for building insurance, maintenance etc

if The current occupant is Staircasing to 100% and then selling to you, then this is a straightforward sale as you  expect with any sale of a flat - you’ll normally be a leaseholder. So there will only be one of the two relationships as above


worth researching the specific freeholder(housing association etc) to see if any problems. Some are better than others. And some are more strict on restrictions than others

Bookworm105

you are mixing up two separate issues

they will be selling 100% of the lease that they then own, having purchased the whole lease from the housing association.

you will then be subject to the terms of that (new) lease. Obviously it cannot therefore contain terms that relate to  anything to do with it a shared ownership situation as it no longer is shared!

no pets, no alteration sound like clauses that may apply in the new lease since they impact all residents in the building and are for the "protection" of all

prohibit ownership of other property cannot be a clause in the new lease as it is not appropriate for a housing association to tell someone not living in property controlled by the HA how live to their life and is obviously a clause to exclude from shared ownership anyone who does not genuinely need it. 

FrenchPinkLady

Thank you for your comments. 

@Bookworm105 do you know a bit more how it works?
I know that the seller is going to staircase at 100% at the time of the sale. However, I would be interested to know more about how to get the "new lease".
My solicitor told me they'd just do a transfer of the actual which for me doesn't make any sense. He said he was used to staircasing and that it's going to be the exact same lease. I'm not sure he's trying to represent my best interests here.

Anyone who has been in this situation and who knows how it works with the lease and if there will be a new one with less restrictive clauses?

Thank you all for your help so far 

teaselMay

After the current owner has staircased to 100% they'll own it in the same way that you would if you buy it and so from that point it will be the same lease. They're currently part tenant part owner though until they staircase.

eddddy

FrenchPinkLady said:

However, I would be interested to know more about how to get the "new lease".
My solicitor told me they'd just do a transfer of the actual which for me doesn't make any sense. He said he was used to staircasing and that it's going to be the exact same lease. I'm not sure he's trying to represent my best interests here.

As your solicitor says, it will almost certainly be the same lease - there won't be a "new lease" granted as a result of staircasing to 100%.

But the lease will specify different rules if you own less than 100% versus if you own the full 100%.



For example, the lease might say that if you own less than 100% you cannot sublet. But if you own the full 100% you can sublet with consent.

It's likely that even if you own the full 100%, the lease will probably have rules on alterations, keeping pets, etc. (All flat leases tend to have those types of restrictions).

user1977

The restrictions have got nothing to do with the percentage owned.

FrenchPinkLady

Sadly I haven't seen anything on the lease making a difference fot someone owning the flat at 100%.
I'm a bit perplexed on how it can be the same rules especially when it comes to renting the flat (provided you've got the agreement of your mortgage lender of course) and owning other properties in the UK or abroad.
How could that be so restrictive?
Anyone who has been on this case before?

And thank you for your help above and for the other comments to come

eddddy

FrenchPinkLady said:

Sadly I haven't seen anything on the lease making a difference fot someone owning the flat at 100%.
I'm a bit perplexed on how it can be the same rules especially when it comes to renting the flat (provided you've got the agreement of your mortgage lender of course) and owning other properties in the UK or abroad.
How could that be so restrictive?
Anyone who has been on this case before?

And thank you for your help above and for the other comments to come

What is the name of the housing association?

SDLT_Geek

FrenchPinkLady said:

Hello everyone, 
I am in the process of purchasing a flat at 100% but the person who owns it is in a shared ownership scheme. They will staircase to 100% to be able to sell me the property in full.
Obviously they have a shared ownership lease but the clauses of the lease are extremely restricted (no alteration, no pets without prior consent, no right to own another property in the UK or abroad).
I've been told that in this case, they only transfer the existing leasehold to the new buyer (it's basically just a change of name).
How is it possible when it's 2 different situations? Anyone has been in this case before? Any advice on how it works would be really great. Thank you in advance for your help! 

If you are good at reading legal documents, then you would want to get a copy of the lease, as that would answer most of your questions.

I understand that many shared ownership leases follow a fairly similar format.  For an example, see the first lease linked from here: https://www.gov.uk/government/publications/affordable-homes-programme-2021-to-2026-standard-shared-ownership-model-leases (the AHP 2021 - 2026 shared ownership flat lease with a CPI based rent review).

If you look at page 33 you will find Schedule 6 (Staircasing provisions) and para 2.3 which tells you which of the lease provisions are "switched off" once the lease is 100% staircased.