The Community Housing Group. Voluntary Right to Buy Pilot Customer Guide

Transcription

1 The Community Housing Group Voluntary Right to Buy Pilot Customer Guide Introduction The Voluntary Right to Buy (VRtB) is a pilot scheme giving eligible tenants of the Group, who do not qualify for the Preserved Right to Buy, the option to buy their home. This is a pilot scheme and this booklet explains how the pilot scheme operates and provides you with some general advice. Remember, this booklet is only a guide to the pilot scheme and is not a substitute for independent legal advice. You are advised to take your own independent legal advice on question relating to mortgages, insurance and legal matters as this booklet is only intended to draw your attention to the stages and the costs of buying a home. Who has the option to buy through this pilot scheme? Funding for the scheme is limited and there is no guarantee you will be able to buy your home. The VRtB pilot scheme is only available to general needs tenants of the Group; this means all tenants living in designated sheltered or supported accommodation are currently excluded from the pilot scheme. A tenant has the VRtB if they have been a tenant with the Group for a minimum of three years and where they do not have the Preserved Right to Buy. A tenant must live in a house or flat which is an eligible property and is their only or main home. Appendix 1 contains a list of non-eligible properties types. You are eligible if: You are over 18 You can prove that you have been a tenant of social or affordable housing for at least 3 years (this need not have been with the same landlord, or continuous); and You currently hold an un-demoted secure tenancy, an assured tenancy, or a Localism Act fixed term tenancy; and You can demonstrate that the property is your main home and you have resided in it for at least the last 12 months; and You are applying jointly with up to 3 family members, these applicants can also demonstrate that it is their main home and it has been their residence for at least the last 12 months. No joint applicant can be added to or removed from the application during the process without voiding the application,

2 requiring a reapplication by the tenant(s). Joint applications where any applicant is ineligible will be voided; and You and any joint applicants, have the right to reside in the UK, and can demonstrate that they meet the immigration status checks. Qualifying period The qualifying period, and the period on which the discount is calculated, can include: Non-consecutive periods as public sector tenants; All undemoted secure or assured tenancies; Fixed term assured short hold tenancies as long as they don t apply to the property being purchased; Any probationary periods as long as they have been completed or do not apply to the property being purchased; Any period spent as a public sector licensee (e.g. alms house; MOD tenant) even though they cannot buy such properties under the scheme. The qualifying period, and the period on which the discount is calculated, cannot include time spent as a non-tenant adult in a parental home. The onus is on the applicant to demonstrate that they qualify for the whole eligibility period being claimed. In exceptional circumstances, tenants can make a statutory declaration, but this would need to be supported by some indirect evidence (e.g. tenancy agreement, Council Tax bill or electoral register). You are not eligible if: You have the Preserved Right to Buy or statutory Right to Buy; at the time of application, you hold an assured short hold tenancy (other than a Localism Act fixed term tenancy), a contractual (non-assured, non-secure) tenancy or are a licensee; You have a fixed term tenancy of less than 2 years, or if they have a periodic assured shorthold tenancy (including a starter tenancy which has not converted); You do not have the right to reside in the UK, and cannot demonstrate that you meet the immigration status checks You are currently subject to the mortgage rescue scheme. You will become eligible if you move to a new property or are granted a new tenancy; You are residents of almshouses or co-operative housing associations; You have any rent arrears or former tenant arrears; You or any joint applicants are subject to bankruptcy proceedings or unfulfilled credit arrangements; You have committed anti-social behaviour as defined in the Paragraph 11 of Schedule 11 to the Anti-Social Behaviour, Crime and Policing Act 2014 and the housing association has initiated legal proceedings as a result of this. Tenants would become eligible if such legal proceedings were withdrawn or discontinued;

3 You are currently subject to legal proceedings, e.g. injunction proceedings have been issued or a notice of seeking possession (NOSP) has been served. Tenants would become eligible if such legal proceedings were withdrawn or discontinued, or if the landlord failed to send papers to the court for issue within 6 months of expiry of the NOSP, or the landlord loses the case in court (including following any appeal); You are subject to legal proceedings at any point between application and completion. Tenants would become eligible if such legal proceedings were withdrawn or discontinued; You already own a property at the point of application; and will not end the ownership on or before the completion of the Voluntary Right to Buy; You hold an assured fixed term tenancy where the original term was 21 years or more (i.e. a long term tenancy); You occupy only a room, or rooms, in a shared house or flat, even if the terms of the occupancy amount to an assured tenancy; You are a shared ownership tenant. How do I apply for this scheme? Applicants for the scheme will need to register on the government s VRtB website to obtain a unique reference number (URN). No eligibility assessment will be made at this stage. We can only accept an application if a tenant has this number. A limited number of URN s will be available and not every applicant will receive one. Please note that, even if you do receive a URN, there is no guarantee you will be able to buy your home. This depends also on the eligibility of your home and its affordability to you. Applicants will be chosen at random by ballot after the gateway has closed. The ballot has been chosen to ensure fair distribution of the limited number of URNs Only general needs tenants can register for the scheme. Sheltered/supported tenants are not eligible. Tenants who qualify and have been issued with a URN will be sent an application form for completion and return. The URN must be included on your application form and The Community Housing group will not accept applications without it. If the property is under a joint tenancy both parties must sign the form. What happens after I send in my application? The Housing Options Team will confirm to the customer that they are accepted on to the VRtB pilot scheme within 4 weeks following the receipt of the application. An administration fee of will be required at this stage. This is only refundable if the sale completes or if we turn down your application. If you choose to cancel the application the fee will not be refunded. If the tenant does not qualify or is not eligible to purchase the property the customer will be advised in writing together with the reason why they are unable to do so.

4 Ineligible Properties The VRtB pilot is for general needs properties which does not include supported housing. Tenants living in supported housing cannot apply. Please see Appendix 1 for a list of properties that are not eligible for the VRtB. Porting your option to buy If a successful applicant cannot buy their home, as we consider their property is excluded form VRtB, we have to offer them the option to port their discount to another home. This home can be from our voids or new build programme. It is considered reasonable to make one porting offer; if the tenant declines their application is cancelled. The porting option must be size appropriate and within the area you are currently living A suitable home and finance will need to be secured within 3 months of the application for porting, if not, the application will be cancelled. How much discount will I receive? The discounts for this pilot scheme are published by the government. The longer you have been a tenant the bigger the discount you get off the market value of your home up to a maximum discount of 80,900 The current discount for the VRtB is a maximum of 80,900. After qualifying, you will receive a discount of 35% if you have been a tenant for three years. The discount remains at 35% for the first five years and after five years the discount goes up by 1% for every year of your tenancy up to a maximum of 70% of 80,900, whichever is the lower. After qualifying, you will receive a discount of 50% if you have been a tenant for three years. The discount remains at 50% for the first five years and after five years the discount goes up by 2% for every year of your tenancy up to a maximum of 70% of 80,900, whichever is the lower. If a customer has previously received a discount to buy a home this may be taken off the Voluntary Right to Buy pilot discount.

5 A step by step guide to buying your home under the VRtB pilot scheme Applicants for the scheme will need to register on the government s VRtB website to obtain a unique reference number (URN). A limited number of URN s will be available and not every applicant will receive one. Please note that, even if you do receive a URN, there is no guarantee you will be able to buy your home. This depends also on the eligibility of your home and its affordability to you. Applicants will be chosen at random by ballot after the gateway has closed. The ballot has been chosen to ensure fair distribution of the limited number of URNs. Tenants who qualify and have been issued with a URN will be sent an application form for completion and return. The URN must be included on your application form and The Community Housing Group will not accept applications without it. The Housing Options Team will confirm to the customer that they are accepted on to the VRtB pilot scheme within 4 weeks following the receipt of the application. An administration fee of will be required at this stage. If the tenant does not qualify or is not eligible to purchase the property the customer must be advised in writing together with the reason why they are unable to do so. Porting a Customer s option to buy If a successful applicant cannot buy their home, as we consider their property to be ineligible, we have to offer them the option to port their discount to another home within 3 months. Where a home is not considered eligible for purchase, see Appendix 1 for list of excluded properties, but the customer has been approved for the pilot scheme and wishes to proceed, The Community Housing Group will make one offer of an alternative property. This offer will be size appropriate and within the area to their current home as possible. However, this has to be an eligible property and the only options that will be available will be from our void and new build stock.

6 We will confirm an alternative offer within 3 months of accepting a customer onto the VRtB pilot scheme. If no offer can be made within this time we will discuss a mutually agreeable extension. A suitable home and finance will need to be secured within 3 months of the application for porting, if not, the application will be cancelled The customer will have 5 working days to consider the offer. If they accept they will be expected to move in as a tenant whilst the sales process completes. Normal rent and service charge will be payable during this period. If the customer declines this alternative offer their application is considered to be withdrawn. The housing Options Team will obtain an open market valuation to find out how much the property is worth. You can choose who values your home from a list of registered RICS valuers on our list. A copy of the boundary plan of the property together with details of any works which might have been carried out will also be obtained. The property does not have to be sold for less than the cost of its acquisition and/or below the cost of works that have been carried out to modernise or improve it. This is known as the cost floor. On receipt of the valuation the discount should be subtracted from the valuation to give the discounted purchase price. An offer notice will be issued advising of the purchase price and the terms and conditions of sale. This will be sent within 8 weeks if the property is a house or 12 weeks if the property is a flat or maisonette. What is an Offer Notice? This states the description of the property together with a plan of the land to be sold with the property The sale price and how it is calculated The value at the time of the application Details of structural defects that we may be aware of Improvements carried out by the tenant which have been excluded from the valuation Details of the discount Service charge estimates, if any Conditions which should be contained in the conveyance or lease. If you want to go ahead with your purchase you must; Advise the Housing Options Team within 4 weeks of the offer letter. If you do not respond within 4 weeks your application may be cancelled. Appoint a legal representative to act on your behalf If you require a survey, arrange for this to be carried out at your own expense

7 If you need one, arrange a mortgage with an approved lender. Your landlord should hold details of which banks and building societies are classified as approved lenders If you cannot secure a mortgage or the capital to purchase their home then their application is considered to be withdrawn. The Community Housing Group will receive your details of the mortgage offer and instruct its solicitors to proceed with the sale. If more information is needed from you we will let you or your legal representative know. Completing your purchase Once we have checked your details, the purchase can proceed. Your solicitor or licensed conveyancer will deal with the legal requirements necessary for the purchase and should keep you informed. Customers are expected to complete the purchase within 12 weeks of receiving their Offer Notice. If you do not complete within the agreed timescale, The Home Ownership Team can consider withdrawing the application. Service Charges Customers purchasing a flat or maisonette will have to pay service charges towards repairs, maintenance, major building works and communal services such as cleaning where applicable. There is also a compulsory Neighbourhood Warden charge. The offer notice indicates the likely service charges customers will have to pay. Repairs and maintenance Tenants who purchase a house are responsible for the costs of all repairs and maintenance to their property from the date their application is received. All repairs and maintenance, excluding health and safety items, will be put on hold whilst the application is proceeding. The cost of buying your own home It is important to give careful thought to the costs and responsibilities of buying your own home. You will need to do some careful calculations to help you decide how much you can afford to spend on buying and running a home. You may also want to contact a housing advice centre for guidance or talk with The Community Housing Group.

8 Survey and legal costs You will be responsible for the cost of your own survey of the property and for the legal fees involved in the purchase. You must use a legal representative (this is either a solicitor or a licensed conveyancer) to handle all the legal formalities of buying a home, and your landlord will need to know the name and address of your legal representative as soon as possible after you decide to go ahead. It is worth asking for an estimate before engaging a legal representative as fees vary. Stamp Duty Land Tax This is a form of tax you may have to pay if the property you buy is over a certain price. Ask your legal representative, building society or bank for advice. Land registry You will have to pay a fee to the Land Registry to register yourself as the new owner. Ask your legal representative, building society or a bank for advice. Building and Contents Insurance If you are a freeholder of a house you will be responsible for insuring your home. If you are a leaseholder under the terms of your lease, The Community Housing Group is responsible for insuring the building. Building Insurance is paid as part of your annual service charges. Building Insurance does not cover your belongings in your home. We recommend you take out your own home contents insurance. Service charges If you are buying a flat or a maisonette as a leaseholder, you will have to pay service charges to your landlord. Service charges are what you have to pay towards repairs, maintenance, major building works such as re-roofing and services provided for the upkeep of communal areas shared by other residents and management costs. There is also a compulsory Neighbourhood Warden charge. They can be quite substantial, particularly in large blocks of flats. It is important you study the offer notice carefully as this will tell you the likely costs you will be asked to pay. Repairs and maintenance Once you have made the application any improvements or repairs that are due to be carried out will be cancelled except where the work is required by law to keep the property water tight and safe. You will also need to take account of likely repairs which you have to pay for. For example, if you buy a flat you are required to pay a service charge and a proportion of repair costs identified by your landlord. You also have to pay for repairs needed

9 inside the flat. If you buy a house, all the costs of maintenance are also your responsibility. Complaints Process If you have a complaint regarding the Unique Reference Number (URN) you should direct your issue to the government website If you believe we have not followed our procedures, you can put your complaint in writing to us or visit the website to register your complaint. This will be recorded, acknowledged and responded to you within 10 working days.

10 Appendix 1 Property Exclusions All exclusions are as per the Right to Buy (Housing Act 1985) unless stated below. All property to be low cost rental accommodation within the meaning of section 69 Housing & Regeneration Act 2008 EXCLUSION RATIONALE COMMENT The Community Housing Group Recommendation A. Supported Housing and Housing for Disabled People each HA to agree local policy as below i) properties where Disabled Facilities Grant would become repayable. ii) properties where significant fixed disabled adaptations have been made (whether DFG funded or not). iii) Disputes dealt with through the Association s complaints process. i) To reflect housing schemes now have more flexible attributes than reflected in HA 85. i) The original RTB exclusion was intended to preserve a stock of specially designed and specially managed accommodation. Since the RTB was introduced, models of provision have evolved. Hence the decision for HAs to set their own policy. ii) Where disabled facilities grant has been paid, there has been a pragmatic decision to exclude these properties, due the complexity of untangling the tenant s liability for repayment, and the treatment of the resulting receipt by the LA. iii) Where significant adaptations have been made (through-floor lifts, wetrooms etc), these may affect values and mortgageability. Again, a pragmatic decision to avoid this complexity within the pilot. iv) Most supported housing will not be included in pilot because of the tenure; this provision picks up longer term arrangements. v) As disputes will centre on the HA s policy, it is appropriate for them to be dealt with by the HA (with recourse to the ombudsman as the final resort). B. Asset Management and Redevelopment (e.g. Demolition/Regeneration/Change of Use/Disposal) each HA to identify any properties to be excluded on this basis

11 Appendix 1 EXCLUSION RATIONALE COMMENT The Community Housing Group Recommendation i) properties where the property is included in a formally agreed asset management programme or redevelopment proposal such that it would not be appropriate to dispose of the property. ii) Disputes dealt with through the Association s.complaints process iii) Recent new builds and old properties. i) To preserve the HAs pre pilot asset management and redevelop proposals; optional for HAs to specifically identify schemes. i) To reduce delays or additional costs in relation to asset management or redevelopment programmes, arising from an increased proportion of owner occupiers in the affected area. ii) As disputes will centre on the HA s policy, it is appropriate for them to be dealt with by the HA (with recourse to the ombudsman as the final resort). NOTE: in some cases, this provision may also help to avoid disputes arising where redevelopment plans result in a reduction in property values for recent purchasers. C. Rural Properties each HA to agree local policy as below i) properties in rural areas (HAs to set their own specific criteria). Option A: HAs draw up a list of excluded parishes. To address difficulties in replacing such properties; option gives HAs flexibility to update/amend rural parish list in RTA. i) To address the difficulty of replacing sold properties, and maintain balance in rural communities. Flexibility is required, as existing rural exemptions from PRTB/ RTA have not kept pace with existing/ planned change in some areas, and may not be relevant in areas that are predominantly rural, but not high value. Do not exclude Option B: HAs rely on the existing list of excluded parishes in the RTA legislation. D. Planning Restrictions

12 Appendix 1 EXCLUSION RATIONALE COMMENT The Community Housing Group Recommendation i) properties where s.106 or other planning agreement restricts the use of the property (e.g. to affordable housing). i) Because of the promise that associations will in principle sell tenants their home, and the complexities cost and delay of porting, associations will contact their local authorities to see if they are amenable to amending s106 agreements. E. Cost Floor i) Cost floor calculation to be as for PRtB. ii) For the pilot, there will be a common policy that no sale will take place if either the cost floor (calculated as for PRtB) or the net debt (calculated as for Right to Acquire) whichever is greater than the discounted market value. Amendments reflect desire for investment in properties to be preserved i) This was considered important because there may be some cases where even the undiscounted value is lower than the recent investment in the property. Even if the cost floor/ net debt calculation eliminated the discount, any sale would cause financial loss to the HA and the HA needs to ensure it has sufficient funds to provide a 1 for 1 replacement. F. 100% Charitably Funded (including Donated) i) d To reflect gifted land/property i) This was part of the NHF Offer, G. Properties with shared facilities or services each HA to agree local policy as below i) properties which are not selfcontained - where ordinary living facilities (such as bathrooms) are shared between i) This was to avoid situations where it would be impossible (or uneconomic) to comply with the requirements for accountability in relation to service charges. Given the promise that associations will in principle sell tenants their home use of this exclusion should only be

13 Appendix 1 EXCLUSION RATIONALE COMMENT The Community Housing Group Recommendation dwellings. ii) Each HA to determine whether to exclude properties that have shared services (e.g. district heating systems, laundries etc). considered in exceptional circumstances. H. Property covenants, other legal restrictions, economic or other reasons preventing sale i) properties where the title restricts the use of the property preventing sale (e.g. restricted to affordable/social housing). ii) properties which have already been identified by the association. i) To reflect potential title restrictions. ii) Principally to ensure where there are loan covenant issues affecting a particular property the association can refuse to sell; for the purposes of the pilot the associations will have identified those properties prior to application; use of a predetermined list is preferable to a provision where the association might have to show what is or is not adverse. It also operates as a catchall but only in the context of pre identified properties. i) To avoid post sale disputes. ii) To act as a catch all, particularly in relation to charged properties, where the cost of extracting properties from charge would be uneconomic. I. Other suggested properties that could be excluded under the guidance (each HA to agree local policy as below J. i) Properties where the landlord does not have sufficient legal interest. Given the promise that associations will in principle sell tenants their home ACS question why have this exclusion what does it matter to the HA? Remember as leaseholders former

14 Appendix 1 EXCLUSION RATIONALE COMMENT The Community Housing Group Recommendation to be able to grant a lease exceeding 21 years for a house or not less than 50 years for a flat. tenants would have the right to enfranchise/extend their lease after 2 years under the respective legislation. The argument for having the exclusion is that the valuation will reflect the property may well be unmortgageable so would be abnormally low. ii) Tied accommodation occupied because the tenant is employed by a social landlord. Licensees will be excluded from the scheme (because they are not tenants). What about service tenancies they can be assured tenancies if they are above a low rent I have asked Sara Woodall whether this came up in the Ops discussions. iii) Specialist properties of historical interest. To preserve buildings which are historically valuable