Shared ownership question

[emc]

Can anyone help? My late father had a flat which was shared ownership. The Housing Association had a 35 per cent share of it and he owned 65 per cent of it. We are going to sell his flat and we obviously have to repay the 35 per cent which was not his, back to the housing association - my question is, is that 35 per cent based on what the flat was purchased for when he bought it, i.e. around 9 years ago or do we pay back 35 per cent of what it's worth now? Any info greatly appreciated. thanks

[Townleygreen]

I believe if you own 65% of a property, then when you sell it, you get 65% of the sale price. It is irrelevant what you paid for that 65% share.

So, if the HA owns 35%, they get 35% of the price you get when it is sold.

[Fabricio the Guido]

Check the provisions of the lease but you are probably looking at the current value of the property.

[Cam123]

Surely they own 35% of the flat's current value, otherwise it wouldn't be a 35% stake, it would be a set figure. The point of it being a percentage is that it adjusts with the market, inflation etc.

And you probably wouldn't ask if your 65% was 65% of the value then or now would you? No different the other way around.

[emc]

Yes, that's what I thought, it's just a bit confusing as he paid rent as well on that 35 per cent share I think and not sure if you get that taken off. Probably not. thanks

[Huguenot]

It sounds like you need to look at the contract emc. I'm sure it'll be pretty clear within it. I'd assume that it was a share at current value, and then anything else will be upside!

[Carrie]

Hi

Depends on what kind of shared ownership it is but normally the lease will contain a provision that you notify the housing associaiton of your intention to sell and they have the flat valued by the district valuer. They normally also have a right to nominate a purchaser for the flat within a specific time frame. If they make no nomination or if their nominee fails to proceed with the purchase then you have the right to sell the property on the open market for 65% of the value set by the district valuer and the buyer acquires your 65% share (rather than selling the flat for the full market value and paying back 35% to the Housing Association. You mention that your father paid rent to the housing association so the likelihood is that the above procedure will be correct. There is another way to own a property on shared ownership which is for the housing association to have a charge over the property for their percentage in which case you would sell for the full market value and then repay the housing association their share. Best thing is to contact the Husing Association and they will be able to let you know the correct procedure.

[Salsaboy]

What Carrie said. The HA will have been through this situation loads of times.