Shared ownership rights
Shared ownership schemes allow you to buy a share in a housing association property and pay a reduced 'rent', called an occupancy payment, for the part of the home you don't own. When you buy your share, the housing association will give you an occupancy agreement, setting out your rights and responsibilities. These may vary between housing associations.
My rights in shared ownership property
When you buy a share in a shared ownership property, the housing association will give you an occupancy agreement setting out your rights and responsibilities. This is similar to a tenancy agreement between a landlord and tenant. These may vary depending on the policies of the housing association. Generally, an occupancy agreement should:
- state that you have the right to live in the property as the owner-occupier
- include details of the occupancy payment and any other service charges you have to pay
- explain your right to buy further shares in the property, and any restrictions that may apply
- explain your right to sell your share if you wish, and any restrictions that may apply
- set out who is responsible for repairs and maintenance, and for insuring the property (see 'who is responsible for repairs' below)
- include other terms and conditions of occupancy, concerning, for example, subletting, assignation and inheritance (see below).
Show the occupancy agreement to your solicitor before you sign it and ask them to explain any legal terms you're unsure about.
How long does an occupancy agreement last?
Occupancy agreements last 20 years, unless you end the agreement earlier, for example, by buying the entire home or selling up.
Once the 20 years are up, you can:
- buy the remaining share of the home - in this case, you must contact the housing association at least three months before the occupancy agreement expires
- sell your share of the home to the housing association
- sell your home jointly with the housing association on the open market
- start a new occupancy agreement.
The housing association should contact you in plenty of time to let you know when the occupancy agreement will expire.
If you signed your occupancy agreement a long time ago and can't remember when it expires, contact the housing association to find out.
Repairs and shared ownership properties
The occupancy agreement should set out your rights and responsibilities for keeping the home in good order. You will usually be responsible for maintaining the property and carrying out any external and internal repairs, and for paying the buildings and contents insurance.
If the property is a flat, the housing association may be responsible for maintaining the structure of the external building. If so, you will probably have to pay a service charge for this. The housing association may be in charge of maintaining common areas such as the stairs, entrance hall and garden (again, you'll probably pay a service charge) or you may be responsible for the upkeep of common areas yourself.
Make sure you know exactly what you're responsible for before you sign the occupancy agreement and ask your solicitor if you're unsure. This will help you avoid possible disputes with the housing association and also your neighbours later on.
If you wish to make any improvements or alterations you will need to ask permission from the housing association. Again, this should be covered in your occupancy agreement.
Mortgage payments and shared ownership properties
Always prioritise your mortgage above all other debts. If you fall behind with your mortgage payments, you may be in danger of losing your home, so it's very important that you take action straightaway.
The section on mortgage arrears looks at what you can do if you are having problems paying your mortgage. You may be able to reduce your monthly payments by increasing the term of your mortgage or making interest only payments, or you may be able to make an arrangement with your lender to pay off the arrears in instalments. If you get income support, jobseeker's allowance or pension credit, you may be eligible for income support mortgage interest (ISMI) to help with the interest payments on your mortgage.
Talk to the housing association: they should have an agreement with the lender about what to do in this situation, and they may be able to negotiate with the lender on your behalf.
You can also get advice from a Shelter advice centre or money advice centre.
Occupancy payments and shared ownership properties
Your occupancy agreement should explain the steps the housing association will take if you can't keep up with your occupancy payments. If not, make sure you find this out before you move in.
Because you own a share of the property, the housing association cannot evict you for non-payment of occupancy payments in the same way as a landlord can evict a tenant. However, they may be able to get a court order to force you to pay up or sell your share of the home.
If you are threatened with eviction, talk to an adviser at a housing aid centre, or your solicitor. For debt advice, call the National Debtline or Consumer Credit Counselling Service helpline, or contact a money advice centre near you.
If you are on a low income or receiving other welfare benefits, you may be entitled to claim Housing Benefit to help with your occupancy payments.
Can I take in a lodger or sublet my home?
Your occupancy agreement should state whether you are able to rent out a room to a lodger or sublet your home. It is unlikely that you will be able to rent out the property and live somewhere else, unless you have a special reason for doing so, for example because you have to go into hospital for a long while.
If you wish to rent out your home, you should first contact both the housing association and your mortgage lender. Bear in mind that renting out your home may affect your insurance and any benefits you receive.
What happens if I die?
When you buy a property, it's a good idea to make a will, to ensure that your home is disposed of according to your wishes if you die. You can write your own 'DIY' will, but it's better to talk to ask your solicitor to help you draw it up.
You have a right to leave your share of your home to another person in your will. However, whether you can also pass onto them (or assign) the part of the home that is still owned by the housing association will depend on your occupancy agreement. It may also depend on:
- who you leave the share to (for example, a husband, wife or partner, or a son or daughter)
- whether they live in the property with you
- whether they meet the housing association's application criteria.
If the housing association will not assign the rented part of the home to the new owner, the share of the home or the property as a whole will be sold and your heir will get a percentage of the proceeds.
Discuss this with your solicitor before you sign the occupancy agreement, particularly if the issue isn't mentioned in the occupancy agreement. It's important that you find out what the housing association's policy is.
Find out more about shared ownership properties
You can find out more about how shared ownership schemes work and who is eligible to apply here.