Owning a share in a shared ownership property comes with benefits and disadvantages that set it apart from the conventional ownership model. In our previous articles we looked at how shared ownership mortgages worked and the profile of buyers they might appeal to. This article will look at the legal ramifications of shared ownership to help you decide if a shared ownership mortgage is the best choice for you.

Maintenance:

As the owner of your home you have the same rights and responsibilities towards maintenance and repairs as any other property owners. This usually means you are responsible for any repairs inside the property while the housing association is responsible for repairs to the outside of the property (as long as you did not cause the damages).

The costs for repairs and maintenance to the outside of the house are funded by service charges you pay every month or year, depending on how the housing association sets your payments schedule.

Staircasing:

If once you have paid for your initial share of your home, you can continue buying shares until the own the whole property. This process of buying your home piece by piece is called staircasing. You can buy more shares in your home at any time once you become a shared owners. To buy more shares contact your housing association in writing and ask for authorization. Note the price of your new share may be higher or lower than the value of your initial share. This will depend on the market value assigned to the house by a valuer. You will have to pay the valuer’s fee.

Selling:

You can sell your shared ownership property at any time but you will need to inform your lender first. If you do not own the entire home, the housing association has the right to find a buyer for the share you do not own. However, if you own the entire property, you can sell it yourself. Nevertheless the housing associate that previously owned a share in the property will likely have the right of first refusal. That means the housing association has the right to buy the property back first. This right extends for 21 years after fully paying for the value of the home.

If you are interested in using a shared ownership mortgage to buy a home, you will need to contact a HomeBuy agent and complete a form application to enter the program. Click here to find a HomeBuy agent near you.

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