Here’s a list of questions about the Shared Ownership Scheme. As these answers are brief summaries, please contact us to find out more.
Do we have to pay the Trust anything during the application process?
What is the legal agreement for the partnership between the Homeowner and Marlborough Sustainable Housing Trust?
It is called a Property Sharing Agreement or Shared Ownership Agreement. It is used to establish the rights of people who own a property together.
This legal document recognises the shared interest the Homeowner and the Trust have as tenants in common.
The percentage of ownership each party has will be recorded on the Trust’s Share Allocation Register. Owners may request to view the register at any time.
Do I need to get legal advice?
Yes, this is most important. A legal representative must have sight of the Shared Ownership Agreement.
What role does the Marlborough Sustainable Housing Trust play?
The Trust has a passive role. It is your home. The Trust only steps in if the Homeowner fails to meet the obligations required in the Agreement and described in the Owner’s Manual. When the property is sold, both the Homeowner and the Trust get their share of any increase in the value of the property.
What is the minimum share that I can purchase initially in the property?
The Homeowner’s minimum share is 50% of the market value of the property. The Trust retains ownership of the remaining share. The Homeowner needs to raise the deposit and a mortgage for their share. In special circumstances the Trust may consider assisting a household into ownership with a share of less than 50%.
Can the Homeowner choose any lender to obtain a mortgage?
Marlborough Sustainable Housing Trust has an approved banking partner who understands and has approved the shared ownership programme.
Can the Homeowner increase their share in the property and eventually own it outright?
Yes, the Homeowner can staircase their percentage ownership by 5% increases based on the valuation at the time. This can be done once a year. Once the owner reaches 85% share they can buy the remaining 15% based on the valuation at the time. The Trust retains the right to decide whether or not it would agree to sell the property outright.
What financial costs is the Homeowner responsible for in relation to the property?
All costs, charges and fees, such as council rates, loan / mortgage repayments, insurance premiums, valuation fees and all maintenance costs.
What happens if the Homeowner cannot meet the mortgage payments?
The lenders will write to the Homeowner in the first instance and if the situation is not rectified, Marlborough Sustainable Housing Trust may require the Homeowner to sell their share to the Trust. This is the worst case scenario. It is best to discuss any difficulties in paying the mortgage as early as possible with the Trust.
What happens if the Homeowners separate (i.e. husband / wife or partners)?
Marlborough Sustainable Housing Trust may choose to require the Homeowners to have the property valued and sell their share to the Trust. This is something that will be looked at on a case by case basis.
What happens if one of the Homeowners in the partnership dies?
The survivor continues to be the Homeowner.
What happens if both Homeowners die (partnership) or the sole Homeowner dies?
Their estate requests to sell their share to Marlborough Sustainable Housing Trust at market value. The Homeowner agrees to this in the Property Sharing Agreement / Shared Ownership Agreement.
What if the Homeowner fails to meet the obligations required in the Property Sharing Agreement / Shared Ownership Agreement?
The Agreement sets out the Homeowner’s obligations, such as paying all costs, charges and fees relating to the property, mortgage obligations and keeping the property in good repair.
If the Homeowner fails to meet obligations with respect to the property, Marlborough Sustainable Housing Trust will serve written notice to the Homeowner to rectify the situation. If after an agreed period of time the situation is not fixed, Marlborough Sustainable Housing Trust may rectify the situation itself. Marlborough Sustainable Housing Trust may be reimbursed by reducing the Homeowners share in the property. This is a worst case scenario, and if there are difficulties, the Homeowner should seek to avert this by discussing their situation with the Trust as early as possible.
Can the Homeowner sublet the property?
You may not sublet or rent out the property.
What about making alterations to the property?
Alterations can be made only with approval from Marlborough Sustainable Housing Trust and at the Homeowner’s expense. Any improvements to the property resulting in increased market value are shared, according to the share allocation of each party.
What if I want to sell my share?
- Inform Marlborough Sustainable Housing Trust first.
- Select a Valuer from the list held by Marlborough Sustainable Housing Trust
- Offer the share to Marlborough Sustainable Housing Trust at a price determined by valuation
- If Marlborough Sustainable Housing Trust does not want to buy, the house can be sold on the open market
- Marlborough Sustainable Housing Trust retains the right to match any offer made and that you wish to accept.
Will there be any fees for selling the house on or applying to increase the Homeowners share?
Yes and these will be declared in the Property Sharing Agreement / Shared Ownership Agreement.
Are there any circumstances under which we could lose money we have invested in the property?
If you wish to sell and the current market valuation of the house reflects a downturn in the market, then your share may be worth less than if house prices were rising. It is a risk that any homeowner takes, that the market price of their house may drop when they want to sell.
Who pays for all legal costs between the Homeowner and Marlborough Sustainable Housing Trust?
Each party pays for its own costs.
How does the Trust assess and choose Homeowners?
Applicants will be assessed in terms of the eligibility criteria for the Shared Ownership Scheme. The Trust will also take into consideration the household’s needs compared to the availability of properties at the time, such as the size of the house (number of bedrooms) and location.
If we don’t succeed with our application, can we go onto a waiting list?
Applicants who apply and are eligible, but who miss out because there is not a suitable house available at the time of application, will go onto a database of waiting applicants.
Applicants who do not meet the eligibility criteria will not be entered in the database. Unsuccessful applicants may re-apply if their circumstances change.