jeffrey
11-12-2008, 13:53 PM
These usually take one or other of the following forms:
1. X owns flat (leasehold).
A. Y wants to buy it on SOL.
B. Y arranges scheme with Housing Association (HA).
C. HA agrees to buy from X, paying full property value (pv) as price.
D. HA grants underlease to Y, in respect of a% of pv.
E. Y pays premium of a% of pv PLUS rent of (100-a)% of full rent that would have been payable had Y been a 1988 Act tenant. Y might finance this by a mortgage advance (in which case the mortgagee will want an additional "Mortgagee Protection" clause in the Underlease.
F. Y has right to staircase (= buy further chunks of pv). Each staircasing increases Y's share (so Y pays appropriate % of extra value acquired)- this needs a revaluation of pv- and reduces HA's share (so Y pays reduced rent). It is evidenced by a Memorandum of Staircasing, endorsed on the Underlease.
G. If/when Y attains 100% share, the Underlease is merged back into the lease that HA purchased from X, so that -thenceforth- it is just as if Y had been X's purchaser.
2. X owns house (leasehold).
Same as in 1 above.
3. X owns house (freehold).
Same as in 1 above, except that HA creates a lease (not an underlease) in Y's favour.
4. HA owns house/flat- perhaps Y is already a tenant paying rent.
Same as in 1 above, except that X is HA (so no purchase involved).
1. X owns flat (leasehold).
A. Y wants to buy it on SOL.
B. Y arranges scheme with Housing Association (HA).
C. HA agrees to buy from X, paying full property value (pv) as price.
D. HA grants underlease to Y, in respect of a% of pv.
E. Y pays premium of a% of pv PLUS rent of (100-a)% of full rent that would have been payable had Y been a 1988 Act tenant. Y might finance this by a mortgage advance (in which case the mortgagee will want an additional "Mortgagee Protection" clause in the Underlease.
F. Y has right to staircase (= buy further chunks of pv). Each staircasing increases Y's share (so Y pays appropriate % of extra value acquired)- this needs a revaluation of pv- and reduces HA's share (so Y pays reduced rent). It is evidenced by a Memorandum of Staircasing, endorsed on the Underlease.
G. If/when Y attains 100% share, the Underlease is merged back into the lease that HA purchased from X, so that -thenceforth- it is just as if Y had been X's purchaser.
2. X owns house (leasehold).
Same as in 1 above.
3. X owns house (freehold).
Same as in 1 above, except that HA creates a lease (not an underlease) in Y's favour.
4. HA owns house/flat- perhaps Y is already a tenant paying rent.
Same as in 1 above, except that X is HA (so no purchase involved).