Shared Ownership Mortgage special clause

Guna

Need some collective wisdom here while I wait for my solicitors to get back to me (if they ever will…)

I am buying a SO newbuild and due to it taking absolute ages, I've just had to reapply for my mortgage with a different lender. There is a clause in the mortgage offer which states: "You must also assign to us the rights in the lease to buy further shares in the property and to buy the freehold or to be granted a new lease".

The wording is a bit ambiguous as it sounds as though the bank can effectively buy the rest of my house and become my landlord. Which will have implications on the rent of the 60% I am not buying. I am also not clear on how it affects my right to staircase.

Anybody with a similar mortgage offer can tell me what it actually means in practice? Do they only exercise this right if I default on mortgage payments? Or am I at risk of loosing my autonomy?

kingstreet

It's a protection clause entitling the lender to purchase the remainder of the equity to make the property more saleable, if needed. It's used in the event of repossession

It's a standard SO mortgage protection clause, by the sound of it.

user1977

As above it's just something they might use if they repossess (so they can staircase and sell with a bigger share if they wish).

Guna

Thank you. I suspected as much but my previous lender didn't have this clause in their mortgage offer. Appreciate your input.

kingstreet

https://forums.moneysavingexpert.com/discussion/comment/81882521#Comment_81882521

Perhaps not but it may well have been in the solicitor instructions to ensure the RSL/HA would accept such a requirement.

user1977

https://forums.moneysavingexpert.com/discussion/comment/81882567#Comment_81882567

Yes, I've usually seen it as a separate agreement directly between the HA and the lender setting out what happens if either of them wants to repossess.