Shared ownership properties offer a pathway to homeownership for those who might otherwise struggle to afford it. However, they introduce unique complexities into the conveyancing process. As Blackstone Solicitors, a law firm serving clients across England and Wales, we understand the intricacies of handling these transactions. This article will delve into the specific considerations and procedures involved in conveyancing for shared ownership properties.
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For a free initial discussion with a member of our new enquiries team, get in touch with us today. We are experienced in dealing with all aspects of residential property law and once instructed we will review your situation and discuss the options open to you in a clear and approachable manner. Early expert legal assistance can help ensure you avoid the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or click here to make a free enquiry and a member of the team will get back to you.
Understanding Shared Ownership
Shared ownership allows buyers to purchase a share of a property, typically between 25% and 75%, while paying rent to a housing association on the remaining portion. This arrangement makes homeownership more accessible, but it also creates a unique legal structure that requires careful attention during conveyancing.
Key Considerations in Shared Ownership Conveyancing
Handling shared ownership properties in conveyancing requires a thorough understanding of the specific requirements and processes involved.
- Leasehold Structure:
– Shared ownership properties are typically leasehold, meaning the buyer owns the leasehold interest in the property, not the freehold.
– The lease agreement is a crucial document that outlines the rights and responsibilities of both the leaseholder and the housing association.
– As solicitors, we meticulously review the lease to ensure our clients understand the terms, including rent reviews, service charges, and any restrictions on alterations or subletting.
- Housing Association Involvement:
– The housing association plays a central role in shared ownership transactions.
– Their consent is required for various actions, such as selling the property or staircasing (purchasing additional shares).
– Communication with the housing association is essential to ensure a smooth conveyancing process. We act as an intermediary, facilitating communication and obtaining necessary approvals.
- Staircasing:
– Staircasing allows buyers to increase their share of the property over time.
– This process involves obtaining a valuation of the property and entering into a new lease agreement.
– Conveyancing solicitors handle the legal aspects of staircasing, ensuring that the new lease accurately reflects the increased ownership share.
– This process often requires a RICS valuation, and the housing association will have specific requirements that must be followed.
- Resale of Shared Ownership Properties:
– Selling a shared ownership property involves specific procedures.
– The housing association often has the right of first refusal, meaning they have the option to find a buyer before the property is marketed on the open market.
– This can add time to the selling process.
– We ensure that the necessary notices are served and that the housing association’s requirements are met.
– The lease will dictate the procedure to follow, and it is vital this is adhered to.
- Mortgage Considerations:
– Mortgage lenders have specific criteria for lending on shared ownership properties.
– They typically require a minimum share percentage and may have restrictions on the housing association involved.
– We work with mortgage brokers and lenders to ensure that our clients secure appropriate mortgage finance.
– It is vital that the mortgage offer is reviewed to ensure it is suitable for a shared ownership property.
- Rent and Service Charges:
– Shared ownership buyers pay rent to the housing association on the remaining share of the property.
– They are also responsible for service charges, which cover the maintenance and upkeep of the building and communal areas.
– We review the rent and service charge provisions in the lease to ensure our clients understand their financial obligations.
– We also check the service charge accounts to ensure that they are being managed correctly.
- Lease Extensions:
– As with any leasehold property, the lease on a shared ownership property will eventually expire.
– Lease extensions are crucial to maintain the value of the property.
– We advise our clients on the process of extending their lease and handle the legal aspects of the transaction.
– The housing association will have their own procedures for lease extensions, and these must be complied with.
- Understanding the Lease:
– The lease is the most important document in a shared ownership transaction.
– It sets out the rights and responsibilities of both the leaseholder and the housing association.
– We take the time to explain the lease to our clients in clear and understandable terms.
– We ensure that our clients understand their obligations and the potential implications of the lease terms.
The Importance of Specialist Legal Advice
Shared ownership conveyancing requires specialist legal knowledge and experience. Solicitors with expertise in this area can ensure that all necessary checks are carried out and that the buyer’s interests are protected.
At Blackstone Solicitors, we have a team of experienced conveyancing solicitors who are well-versed in the intricacies of shared ownership properties. We provide clear and practical advice to our clients, helping them navigate the complexities of the process and achieve their homeownership goals.
Conclusion
Shared ownership properties offer a valuable opportunity for individuals to enter the property market. However, the conveyancing process requires careful attention to the unique legal structure and requirements involved. Understanding the leasehold structure, housing association involvement, staircasing, resale procedures, mortgage considerations, and rent and service charges is essential. Seeking specialist legal advice is crucial to ensure a smooth and successful transaction.
How we can help
We have a proven track-record of helping clients purchase a new home. We are a multidisciplinary firm and have all the expertise inhouse to satisfy the most exacting requirements of our clients. We will guide you through all the necessary legal due diligence in a comprehensive and timely manner. We firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.
How to Contact Our Residential Property Solicitors
It is important for you to be well informed about the issues and possible implications of buying a residential property. However, expert legal support is crucial in terms of ensuring a positive outcome to your purchase.
To speak to a member of our New Enquiries Team today, simply call us on 0345 901 0445, or click here to make a free enquiry. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.
Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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