The process of selling a shared ownership property is different from your typical residential conveyancing transaction. Carol-Anne Gretton from Fraser Brown solicitors explains what processes you need to follow in order to sell a shared ownership property.
In this process, you will need to communicate with the Housing Association, and consider your requirements under the lease agreement.
Having been through the process of purchasing a shared ownership property, you may already have some understanding of staircasing and shares. However, it is useful for sellers of shared ownership properties to have some guidance in advance.
The process of selling a shared ownership property* Under the terms of a Shared Ownership Lease, the current owner is required to notify the Housing Association when they wish to sell the property. The Association then decides if they wish to try to find a Buyer, and if not, will issue confirmation to the owner that they can sell the property on the open market.
* The owner can then sell their existing share. A Buyer may wish to buy an increased share in the property, in which case the owner would then need to purchase such additional share from the Association to allow the sale to the Buyer. The purchase of additional shares in the property is known as staircasing.
Sale of an existing share* Once a Buyer is found, a usual residential contract pack will be supplied to the Buyer's Solicitors, but this will incorporate the Shared Ownership Lease relating to the property.
* As the property is and will continue to be a Shared Ownership property, the next step for the owner will be to contact the Housing Association and obtain a management pack from them advising of their requirements. This information will also be passed on to the Buyer's Solicitors and complied with accordingly.
â€¢ From the owner's perspective the transaction would then proceed on the similar lines to a usual residential conveyancing transaction.
Sale of existing share where staircasing is also involved.* If a Buyer wishes for buy an increased share in the property, it will be necessary for the owner to purchase such additional share simultaneously with the sale to the Buyer. The owner will need to contact the Housing Association to advise on the matter, which will be followed by a valuation.
* The owner's solicitors would deal with the normal shared ownership sales procedures as outlined above, and would contact the Housing Association's Solicitors to deal with the documentation required to purchase such additional share.
* It will also be necessary to look into the stamp duty position, as to how stamp duty was paid when the initial share was purchased. If stamp duty was only paid on the initial share, then it may be payable again on the purchase of the additional share depending on what percentage of the property will be owned by the Buyer following the purchase of the additional share.
* It is a condition of the purchase of any additional shares from the Housing Association that completion of the transaction takes place within 3 months of the date of the valuation.
* Upon completion, the owner's solicitors would receive the full amount from the Buyer's Solicitors and pay the Housing Association's Solicitors the required amount for the additional share.
If you're interested in any of the topics raised in this article, or for further information, you can contact Carol-Anne Gretton by email at firstname.lastname@example.org, or call to speak to one of the team on 0115 9888 777.