All you need to know about shared ownership leases
The legal side of buying a home can be daunting, especially for first-time buyers – but property solicitors and conveyancers are available to help. Lesley Price, head of shared ownership at Lawcomm Solicitors offers her tips for making sure you get solid legal advice, and have a good understanding of the terms of your lease.
How do i find good advice?
Most housing associations and shared ownership brokers will have a panel of property solicitors or conveyancers they recommend you use if you want to buy or sell a shared ownership property. You aren’t obliged to use the ones they recommend, but they will generally be firms known to have a history of dealing with shared ownership homes and will have full knowledge of the process.
What should i look for in my leasehold agreement?
You will want to check the following with your legal adviser:
- Are there any restrictions that would prevent you staircasing to the full 100 per cent?
- What size share can you buy at a time – is there a maximum and minimum amount?
- Does the service charge you are paying cover all the costs you may pay (for example, charges of estates for communal services) or are these billed separately?
- Is a percentage re-sale fee payable to the housing association when you want to sell?
- What alterations might you need consent for, and what is the process to apply for this?
- Who maintains the building? Some shared ownership houses these can be sold on full repairing leases, where you take more responsibility for maintaining the building itself.
Do i need to take legal advice if i staircase?
If you are staircasing you will need legal help with the legal paperwork. Your solicitors will need to make sure that you are paying the right amount of stamp duty applicable to your transaction, as the stamp duty payable in these circumstances is far from straightforward. If you are buying the final share in your home, you also need to understand how your rights and responsibilities for issues, such as maintenance and payment of service or estate charges, will change once your shared ownership lease comes to an end.
How is my legal status different to someone who has bought their home in full?
If you get into difficulty paying your mortgage, it may be possible on agreement with the housing association and your lender to ask the housing association to buy back part of the property, so you own a lesser and therefore cheaper share. They are not obliged to do this, but it is an option to ask about to avoid losing your home. For some mortgage products you can request that the mortgage lender covers the rent payments for a temporary period if you have a genuine reduction in income. For example, a period of sickness after which you expect to return to work. If the housing association sought to take possession proceedings under the Housing Act 1988, it must give the mortgage lender at least 28 days’ written notice. This can allow the lender time to arrange a solution with you and the housing association.