Shared ownership – new guidance

The CML, NHF, HCA, BSA have produced new guidance on handling arrears and possession sales of shared ownership properties (the previous guidance was in 2010 and the contact details provided were out of date).  I am not sure that there is a huge difference between the 2010 and new guidance – the documents are slight on detail, but the key point is the stress on contact and relationships between providers and lenders, which (I gather) may be an issue in practice.  Readers of this blog may be interested in the only really specific (enough?) guidance:

The key rule when considering taking action over arrears is not to seek possession where there is a reasonable alternative.  If this is not possible, HAs are legally entitled to use Ground 8, which is one of the mandatory grounds for possession of an assured tenancy listed in Housing Act 1988 Schedule 2.
However, the use of Ground 8 is an extreme step in the context of shared ownership housing, the effect of which is similar to forfeiture.  It should not be necessary where the HA and lender work jointly to resolve the problem, if possible with the shared owner.
When the use of Ground 8 is unavoidable, the decision should be taken at an appropriately senior level in an organisation, and the lender should be told that this course of action is intended at least 28 days before notice is served.
It is most important that both parties understand the requirements placed on the other in respect of the borrower/tenant, and take these fully into account when dealing with arrears/possession.

Various bodies are suggesting and recommending that shared ownership is the way out of the housing crisis, but it does contain risks to all parties.  Many of these risks are blended out by the application process, but, by its nature, risk is contingent on future events and unpredictable.  Conveyancers and advisors should be aware of this guidance and advise buyers accordingly.

Posted in Housing law - All, Leasehold and shared ownership, Possession.

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