Shared Ownership Lease
When a shared ownership property is purchased, the remaining percentage that is not purchased will be owned either by the social landlord (the most common scenario), or by the developer in commercial situations. This remaining percentage is then occupied under a lease which is its own legal document.
Terms of the Shared Ownership Lease
Almost invariably the lease granted is a 99 year lease. But, if you are purchasing a re-sale property that has already been a shared ownership property, previously, then the term may be shorter, as some of the years have already been 'used up'.
The lease will have terms that allow you to live in the property; it will deal with the issue of how you purchase further shares and what the process for selling the share would be, in the future. As well as the practicalities of being a shared owner, the lease will also govern the way that the responsibilities such as repair and maintenance are dealt with. In most residential leases, the landlord takes responsibility for the external and structural repair of the property; however, in the case of a shared ownership lease, it is common for the opposite to be true, whereby the tenant who is, in effect, the owner occupier becomes responsible for almost all of the ongoing costs.
Altering the Lease
As time goes on, you may wish to alter the lease by purchasing more shares, selling the share that you do have or even transferring the share, for instance, from your own name to a joint ownership. In almost every social lease there will be a term that states that the housing association's approval is required to vary the lease in anyway. This means that if you wish to change the wording of the lease in anyway, you will require permission, but you will not require permission to do anything already permitted under the terms of the lease.
Typically, the types of amendments that require permission include changing the way service charge calculations are apportioned, transferring common parts of the property to the leaseholder and making amendments to reflect legislative changes such as new regulations. In the case of a property being transferred, then a change in the lease will be required to reflect the fact that the housing association is now the landlord of a new tenant.
The terms of the lease on the remaining percentage of the property are just as important as the actual sale deed;
in most situations, new shared ownership leases are granted for 99 years;
unlike most residential leases, the burden of repair and maintenance is usually passed to the tenant in a shared ownership situation.