The United Kingdom’s property market is a dynamic and ever-evolving entity, with individuals exploring diverse avenues for investment and ownership. As circumstances change, you may find the need to sell your share of the house. In this article, we delve into the intricacies of selling a share of a house in the UK under a shared ownership scheme, the legal requirements, and potential pitfalls to avoid.
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Understanding Shared Ownership via a shared ownership scheme
Shared ownership schemes are designed to help individuals who cannot afford to purchase a property outright. Under this arrangement, the buyer purchases a share of a property (usually between 25% and 75%) and pays rent on the remaining share, which is typically owned by a housing association.
Before attempting to sell your share, it’s crucial to determine the nature of your shared ownership agreement, as this will dictate the necessary steps to follow.
Selling Your Share of a House
Obtain a Property Valuation
To establish the value of your share, arrange for a professional valuation of the property. This step is crucial, as it helps to determine a fair and accurate price for your share, which is essential for attracting potential buyers.
Communicate with the Housing Association
Discuss your intention to sell your share with the housing association. Open communication is vital, as it allows for a smoother transaction and mitigates the risk of disputes. The housing association might have the right of first refusal, which means they have the opportunity to find a suitable buyer for your share before it is offered to external buyers.
Legal Documentation and Formalities
Consult a solicitor to help draft the necessary legal documents, such as a Shared Ownership Resale Application Form, which outlines the details of your shared ownership agreement, the value of your share, and the process for selling shares. Your solicitor can also assist with updating the Land Registry and ensuring compliance with any regulations.
Finding a Buyer
If the housing association declines the option to find a buyer for your share or is unable to do so within a specified time frame, you’ll need to find an external buyer. Utilise the services of an estate agent, advertise online or through local media, and consider reaching out to your network for potential buyers. Be prepared to provide full details about the property, the shared ownership scheme, and your share’s value.
Do property buyers buy shared Ownership via a shared ownership scheme properties?
Property buying companies often refrain from purchasing shared houses due to the complex nature of shared ownership agreements and the involvement of housing associations. These companies prefer straightforward transactions that allow them to quickly acquire and resell properties.
Shared houses may come with additional restrictions, such as the housing association’s right of first refusal, limitations on subletting, and potential rent arrears, which can make the process more time-consuming and challenging.
Additionally, shared ownership properties typically cater to a specific market segment, which might not align with a property buying company’s target demographic.
Negotiating and Completing the Sale
Once you have found a buyer, work with your solicitor to negotiate the terms of the sale, including the price and any conditions. Your solicitor will help draft the sale agreement and ensure all legal requirements are met. Upon completion, the buyer’s share will be registered with the Land Registry.
Selling your share of a house under a shared ownership scheme can be a complex process, and certain challenges might arise, such as:
Housing Association Disagreements
Disputes with the housing association can derail the sale process. Maintain open communication and seek legal counsel to help navigate potential conflicts.
If there’s an outstanding mortgage on the property, consult with your lender to discuss the implications of selling your share and any potential penalties.
Some buyers might be hesitant to purchase a share of a property under a shared ownership scheme, as it entails a more complicated ownership structure. Be prepared to provide clear and concise information to address any concerns.
Selling a Shared House After a Divorce
Agree on the Sale
First and foremost, both parties must agree to sell the shared house. If an agreement cannot be reached, it may be necessary to obtain a court order to force the sale. Consult with your solicitors to determine the best course of action for your situation.
Establish the Ownership Structure
Determine whether you own the property as joint tenants or tenants in common. This distinction is essential, as it dictates the division of proceeds from the sale. If the ownership structure needs to be changed, consult with your solicitors to draft the necessary legal documents.
Obtain a Property Valuation
Arrange for a professional valuation of the property to determine its current market value. This information is crucial for setting a fair and accurate price for the house, which will help attract potential buyers.
Appoint an Estate Agent and Solicitor
It’s advisable for both parties to agree on a single estate agent and solicitor to handle the sale process. This approach can streamline communication and minimise potential conflicts.
Prepare the House for Sale
Work together to prepare the house for sale, addressing any necessary repairs and decluttering the property to make it more appealing to potential buyers. This step may require some compromise and cooperation, so keep the end goal in mind.
Negotiate and Complete the Sale
Once a buyer is found, work with your solicitor to negotiate the terms of the sale, including the price and any conditions. Your solicitor will help draft the sale agreement and ensure all legal requirements are met. Upon completion, the proceeds from the sale will be divided according to the ownership structure or the agreement reached during the divorce proceedings.
Address Outstanding Mortgage Obligations
If there’s an outstanding mortgage on the property, consult with your lender to discuss the implications of selling the house and any potential penalties. The proceeds from the sale will typically be used to pay off the remaining mortgage balance, with any surplus funds divided between the parties.
Selling a shared house after a divorce can be challenging, but with careful planning, clear communication, and cooperation, it’s possible to navigate the process successfully. By following the steps outlined in this guide and seeking legal guidance, both parties can work towards a fair resolution and move forward with their lives.
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And that just about covers everything you need to know about 30-day house sale specialists. So, for a quick sale in as little as seven days with a completion date to suit you, call Home House Buyers today on 0800 612 1366.
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