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Leaseholder charges for shared owners

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Saturday 31 January 2009 11.09pm
Have any of you who have bought via shared ownership found that your leaseholder charges have increased a lot after you bought (or any of your charges, but particularly leaseholder charges).

Is there any other drawbacks you found. This is particulaly for SE1, but if anyone else has anything to add, I'd like to hear about your experiances.

I've been asked to do some research on it.


Thursday 5 February 2009 9.01am
Leaseholder charges in the form of the annual service charge on any new built block almost always grow rapidly, whether its for shared or outright ownership after the first few years. This is beacuse the developer sets the charge very low for the first couple of years to entice buyers....and obviously with a new block not much should need doing (outside of general maintenece like cleaning, window cleaning, maybe gardening if you have one) but no Major Works should be required. Then leaseholders (all types) realise they need to put more by for maitainence and repairs and sometimes to cover earlier shortfalls (management companies are not legally allowed to run an overdraft) and all of a sudden the bills shoot up. Its been like this for years and developers are well known for this sort of thing both in the fully private sector and in the mixed ownership area too.
Thursday 5 February 2009 9.07pm
Thanks Urbanite, do you know anyone this has happened to that I could speak to?
Friday 6 February 2009 11.22am
Anybody who lives in a new build flat, either fully private or shared-ownership, and has bought their flat anytime in the last 10-15 years (when this selling technique has been rife) will tell you exactly the same thing. Very new flat owners may not be able to help you because the building management hasn't been handed over by the developer yet and the books not properly checked over.
Friday 6 February 2009 9.22pm
My lease is OK but I have other problems.

When I bought my shared ownership home ten years ago I was told I could staircase up (buy more shares) anytime I liked at the market value which would be established by the Borough Surveyor (who I had to pay) and that the rent on the remaining shares owned by the Housing Association would go down.

When I tried to staircase up about four years ago the Borough Surveyor (300) refused to value my home until I told him if I was buying or selling. He would not tell me what the price difference was but admitted there was one. Presumably it is higher if I'm buying and cheaper if I'm selling (the Association have first dibs if you sell) otherwise why be shy about telling me? The valuation came in higher than I expected.

When I tried to proceed with the purchase anyway I was then told by the Housing Association that if I staircased up another share my rent on the remaining share owned by the Association would be revalued and would actually be MORE on the new smaller share they owned than the amount I was already paying now on a much larger share. When I bought the place I was told when I staircased up another share the rent on the remained would go DOWN.

So I have two questions. What is this two tier valuation system and where did that come from, and why wasn't I told about it or the fact that they re-value the rent on your remaining share when you staircase to dramatically put it up, when I bought the place?
Saturday 7 February 2009 10.13am
Hi Davies,

I've sent you a PM.
Friday 13 February 2009 9.12am

The orgsanisation to contact is the Tenant Services Authority. There can be problems here. However if the property was grant funded by nthe then Housing Corporation (of which the TSA is a sucessor organisation) there may well have been conditions/limits attached to that funding, and there will be rules around how much the Housing Association who is part owner can charge, at least for the rent element but perhaps for the service charge.

Another place to look is Southwark Planning. I think Southwark was a leader in helping ensure that "affordable housing" stipulated in planning application was that - affordable, and at one stage was limiting the total annual costs for the non-equity stake.

Also your lease. Does this stipulate the % cost you pay for the affordable bit or for the whole development. If the former perhaps you and your neighbours can go through the detail of the costs, and perhaps decide which elements could be reduced. If the latter worth a discussion with the TSA is you are paying for services mainly used by the private element.

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