hello, welcome to the state of our webinar entitled shared Ownership leases. In some respects, shared ownership is perhaps something of a misleading term. Under a shared ownership lease, the tenant is the only legal and beneficial owner of the leasehold term. It is therefore the sole owner off the lease. So in this context, shared ownership does not denote a joint tenancy or indeed, even a tenancy in common. There is, by and large in terms of form, at least a very traditional landlord tenant relationship. However, the nature of the arrangement under a shared ownership lease is that in accordance with Section 622 of the Housing Act 1985 the tenant pays on affordable premium for the grant of the tenancy on the amount which the tenant pays is only a proportion of the actual value or cost of the property on. The tenant also pays on affordable rent for the property. During the term of the lease, which is typically 99 years again, the mountain, which the tenant pays is only a proportion of the actual open market rental value of the property. The purpose of shared ownership, therefore, is the both the premium and the amount of the rent should be affordable. I below the full market rate lieutenant. There are currently a number of shared ownership products on the market. For example, you build home by social home by on market home by all of which are designed to help social tenants on others in priority need of housing to purchase a suitable home. The generic term for all of these products is simply home by the amount of the rent which is paid by the tenant is inversely proportionate to the proportion paid of the actual value or cost of the property. Or, to put it another way, the more that the tenant puts down by way of an initial payment, the less rent the tenant has to pay during the term. So, for example, if the tenant puts down 25% of the value or cost of the property by way of premium payment, the town was then pay 75% of the market rent. Conversely, if the tenant puts down 75% of the value or cost of the property by way of a premium, the knee only has to pay 25% of the old market rent going forward. Of course, the least needs to be mortgage herbal because otherwise the tenant won't be able to borrow the amount of the premium, which is required to be put down in order to qualify for the grab of a shared ownership lease. There are some relatively complicated statutory formula, which has set out in the housing at for the purpose of calculating how much it is that the talent is required to pay, depending on the amount of the premium which has been put forward but nonetheless without Russians to the formula. The mechanism is, as I described it, it is in the sense that the tenant only pays a proportion of the value of the property and in conjunction with that only pays a proportion of the open market rental value for the property in question that the tenant is said to have a share in the property along with his landlord, the landlord will typically be a housing association, which provides properties to those who are unable to purchase property on the market as part of their operating business. Attendant under a shared ownership lease, is entitled to buy further shares so is to increase the proportion of his ownership of the reversion. Re interest this mechanism off, creating additional shares on, therefore incrementally increasing the amount of one's interest in the freehold or in the leasehold reversion is known as staircases. Any increase in the amount which the tenant pays by way of premium, which is assessed against the value of the property at the time of further payment not against its value at the time of original acquisition, produces a corresponding reduction in the amount that the tenant pays by where rent. So, for example, if the tenant staircases from 50% to 75% the rent payable will reduce from 50% to 25% if the tenant is allowed to staircase. Andi some shared ownership leases don't actually permit this, and I'll talk about that later. Then the tenant will be entitled to, firstly tohave the freehold of the property transferred to him if the property is a house or the ground of a conventional long lease of the dwelling, if it's a flat now. In fact, some shared ownership leases may provide so far is that leases of flats that instead the existing lease will continue and that's simply the staircase in provisions in it will cease to be of any effect. As I said, there are certain shared ownership leases which don't allow staircases to take place. Um, in that case, the shared ownership lease is known as a fixed equity. Least on. The purpose of not allowing staircases is to make sure that the property in question always remains available as affordable in perpetuity and therefore balls always remains parts off the providers housing stock Shared ownership leases are generally granted by registered social land ALS and usually receive public subsidy Conditions attached to public funding include conditions relation to the contents of shared ownership leases on these air imposed by the Housing and Community Agency, which the grab making functions of the housing corporation have been transferred. That said, there are unregistered housing associations which also provide housing, particularly in non urban areas, on shared ownership terms without any element of public subsidy, and in such circumstances, the requirements of the H C A will not apply. Over the last few years, the government has introduced the number of low cost home ownership schemes on the theme of shared ownership since March 2006 The Housing Corporation a more recently, the H C A, has entered into home by agent contracts with a number of registered providers acting as effectively home by agents. The HC A has selected thes home by agents in order to provide what they call a one stop shop service for assessing eligibility and marketing. The Hchs home by affordable home ownership products to the community. Home by agents have individual service level agreements with registered proprietors who are in receipt of grub, under which the home by agent agrees to assess the eligibility of prospective tenants and leaseholders, and generally to market affordable home ownership schemes. Full details of the various schemes are set out in the HCS Capital Funding Guide, which is available on the HC A's website. In addition, the government, in conjunction with the age, say the counselor Morgan that mortgage lenders on the National Housing Federation has published guidance for registered providers offering shared ownership, unregistered bodies who offer shared ownership and mortgage lenders and convinces in England that information relates to all the hcs ground funded shared ownership products out which I've previously referred to, this webinar just for clarification deals only with shared ownership leases in England, which are granted by private registered providers. Information on shared ownership in Wales is available on the Housing and community Page is part of the website at for the Welsh government. In terms of the power to grant shared ownership leases, most registered providers have power to do so under their constitutions, either by virtue off. Firstly, having been registered social landlords under the previous regime. I under the Housing Act 1996 as originally enacted, in which case they were registered automatically on the register of providers under the HR A 2008 on the first of April 2010 all they have been subsequently registered as a provider on or after the first of April 2010. Model rules in relation to shed ownership leases include amongst their objects any other, and it may or may not be charitable object that because that can be carried out by an industrial Providence society registered as a social landlord with the Housing corporation now the H C A or as a provider of social housing registered with the regulator of social housing in England, this object is limited in the case of charitable registered social landlords to charitable objects. Thus, registered providers with rules in such terms will have powers to grab shared ownership leases. As from the first of August 2014 industrial and provident societies have been renamed as cooperative and community benefit societies and the industrial on Providence Societies acts have been re titled. Accordingly, charitable registered providers can only grant shared ownership leases in accordance with their charitable objects in terms of disposal of shared ownership leases. A private registered provoked provider cannot dispose of social housing dwellings without the consent of the regulator of social housing, which since the first of April 2012 is now the HC. A regulation committed shared ownership leases are generally exempt from the need for consent because they are typically tendencies for which a general consent has already been issued, omitting disposal on certain terms, provided that conditions set out in the consent are satisfied and in this connection, the current governing consent is the tenant services authorities General consent of 2010 in relation to disposals. There are a number of conditions which have to be satisfied. Of particular relevance are the following Firstly, the grounds of the lease must be within the private registered providers powers. And if the private registered providers is a charity, it must comply with charity law. Secondly, the consent of anymore G must have been obtained and thirdly, before the disposal takes place, an officer of the register provider must certify to the dispose me in the specified form that the provisions of the 2000 and eight acts and more particularly Section 100 said to have been complied with by in particular specifying the category of the general consent which applies. Identifying the interest or title which is being disposed off, and identifying the social housing dwelling or dwellings which are the subject off the disposal. Turning to a statutory shared ownership onto the social home by scheme. Uh, the position here is that a secure tenant, it was a tenant whose tendency has been granted by a local authority or by certain other designated public sector bodies and who has the rights to buy Under the Housing Act 1985 was entitled in certain circumstances to be granted a shared ownership lease by reference to a discounted value in the same way that secure tenants were entitled to buy their council house at a discount. This right is no longer available because it was actually repealed in October 1993 a za result of the Leasehold Reform Housing Development Act 1993. But there are a number of shared ownership leases granted under the rights to buy scheme at which continue to exist. Under the scheme permitted by the right to buy in the 1985 housing at the minimum initial percentage, which the tenant had to contribute in order to acquire a shared ownership lease at a discount was 50% under. The initial percentage had to be a multiple of 12.5, said eso. The minimum was fished in. Of course, the next step was 62 a half said 75 would be the next step and so on. The tenant is entitled under such a shared ownership least staircase in multiples of 12.5% uh, on the right to purchase additional shares onto the other. Terms of the lease are regulated by Schedules six and eight of the Housing Act 1985. As in the case of the more general right to buy scheme in relation to the freehold or long leasehold interests in council houses. A shared ownership tenant disposed of his lease within three years of original acquisition was obliged to repay all or part of the discount. Previously obtained. Tenants of a registered provider do not have a statutory right to be granted a shared ownership lease. But the Social Home by Scheme, which was introduced by the HC A, allows a registered provider to dispose of rented housing stock at a discount on a shared ownership lease to secure and assured tenants who occupied rented stock and are eligible for the scheme. The HC A pays the amount of the discount to the registered proprietor in accordance with section 19 of the 2000 and eight Act. The social Home by scheme allows registered providers to sell permanent rented housing stock to tenants may not have or cannot afford to exercise their statutory budged By all right to acquire THC, A has issued a sample shared ownership least for this special area, looking at registered providers in a little more detail. If registered providers provide housing through shared ownership leases, using a grant from the agency A. They must ensure that the shared ownership lease complies with the requirements set down by the HC A. In that regard, ph. D. A. Has issued a number of sample leases for both houses and flats. On I'll talk about those leases a medical more detail that when I come to examine the contents of a shared ownership lease. Uh, as is apparent from the fact that there are a number of sample leases, there are, of course, a number of various forms at which a shared ownership leaves come. Take perhaps the most critical point to note on referring back to something which I said earlier in relation to stare casing. On certain instances, fixed equity shared ownership leases. There are certain leases, namely rural shared ownership leases and elderly persons shared ownership leases where the tenant is not permitted two staircase to 100% of the value or cost of the property. This means that the landlord and tenant relationship is always preserved in relation to such leases, giving the landlord control over future owners had occupiers and, in the current case of elderly persons, shared ownership, enabling appropriate services to be provided and service charges which 11 in relation to those services to be recovered. The sample leases, which have been published by the HC A, should be used by registered providers for ground funded schemes. Now the HCL recognizes that releases may need to be amended or adapted to fit. A particular scheme on it is permissible to make appropriate and necessary adjustments as required. That said, certain clauses are mandatory and must be incorporated as a condition of receiving grant funding on the consent of the H C. A will need to be obtained through a variation of those fundamental conditions, including any variation to the right of first refusal or preemption, which is contained within a shared ownership. Police in terms of the inter relationship between shared ownership leases on the other statutory regimes which apply in relation to residential tendencies. In general terms legislation which applies to the relationship between landlord and tenant in relation to residential premises. We'll continue to apply to leases which are granted on shared ownership terms. So, for example, the provision of sections 18 to 30 but the Landlord and Tenant Act 1985 in relation to service charges that will also apply, but There are a number of sexual rights which don't apply to Alesci, where his landlord is a registered provider. So, for example, the rights to appoint a manager under Part two of the Landlord and Tenant Act 19 eighties site, 1987 is excluded in relation to shared ownership leases, as also is the rights to acquire the landlord's interest compulsorily under Part three of the 1987. The unfair terms in consumer contract regulations 1980 1999 Do apply two shared ownership leases on the basis that it's considered that they applied to allow residential leases. And in any event, the HC A requires that registered providers must offer leases to tenants, which comply with the 1999 regulations. In terms of security of tenure, a shared ownership lease must always be granted for a term which exceeds 21 years and so, as a result, cannot ever be a secure tenancy. Um, for confirmation of that, see the definition of a long lease in Section 79 schedule one of the Housing Act 1985. On the other hand, a shared ownership police, maybe on assured tenancy if it satisfies the appropriate conditions. Now, in this it scenario, a tendency cannot be assured tenancy if the red is a lo read as defined by statute. Now, in the case of the least crowded before the first of April 1990 a low rent is a rent, which is less than two first of the Rachel value in relation to that property, as at the 31st of March 1990 and in case of leases granted on or after at First of April 1990. A low rent is £1000 a year Greater London or £250 a year if granted in relation to any other part of the country. Turning to read and service charge control a shared ownership lease of which a registered provider is the land old. May, in admittedly relatively rare circumstances, be subject to rent control under Part six of the Rent Acts 1977. These provisions only apply where the lease was granted before the 15th of January 1999 because since that Dave has not been possible to grab a a housing association tenancy. In any event, a shared ownership lease granted by registered social landlord, which complies with the conditions of Section five Capital A of the rent out 1977 cannot be a protected tenancy and so cannot be subject to read control. In the case of assured tendencies, a shared ownership leads cannot be subject to statutory Brent control because that's the consequence of section 13 of the Housing Act 1988 Safaris Regards Service Charge Controls a zai mentioned when looking at thier inter relationship between shared hope. Shed ship leases on other statutory regimes which apply to residential premises. Generally. Sections 18 to 30 of the landlord and Tenant Act 1985 apply in relation to shared ownership leases so as to restrict the amount of service charge or administration charge. Which aid landlord in this case, a registered provider is entitled to recover from a tenant more, particularly on the powers conferred by Sections 219 and 220 of the Housing Act 1996. The secretary of state has given registered providers a discretion toe waive or reduce service charges for repair, maintenance or improvement where the cost of those repairs, maintenance or improvements has been met wholly or partly with assistant with assistance from various specified funding initiatives where the funding application was made on or after the 25th of Jan. February 1997. The registered provider must reduce the service charge to a maximum of £10,000 over a period of five years after taking account of any resultant increase in the value of the dwelling. Now, in terms of the ability of certain tenants to enfranchise on so therefore effectively to attempt to control they were the amount of red service charge which they are required to pay by acquiring the land ALS interest. The position is that in the broad terms, any tenant occupying a house under a long lease on because the shared ownership leads will be a long lease has in principle the right under part one of the leasehold Reform Act 1967 to acquire the freehold off the house, which he occupies, or to be granted an extended lease off it. Now there are a number of exclusions from this right which are not exclusive to shared ownership leases, but nonetheless maybe applicable. In the case of a shared ownership least, the first exclusion is where the lease was granted on the part five of the 1985 housing at on the immediate landlord is a housing association, and the freeholder is a charity or, if the lease was granted on or after the first of November 1993 on the landlord is a charitable housing trust or where the lease was granted under the rights to a shared own ship. Leaves formally given by the 1985 Act in relation to secure tenants, as they say that right was actually abolished with effect from October 1993 or where the lease is a shared ownership leads granted by local authority or by certain other public bodies at a premium under which the lessee is entitled to require the freehold for a reasonable consideration from where the least contains a statement to the landlord's opinion. But it's outside part one of the 1967 at, and it specifically, in the case of shared ownership leases. The's right to acquire under the 67 act will not apply if a shared ownership lease was granted by a housing association on bat least complies with the following conditions. Firstly, the term is at least 99 years cannot be determined except by way of re entry or forfeiture. The tenant paid a premium equal to at least 25% of the cost or value of the property. The least provides for the tenant to acquire an additional 25% share, or whatever small a percentage the lease allows on this right must be exercisable at any time. On the price payable must be no more than the percentage of the then market value corresponding to the share being acquired. Andi on acquisition of the additional shared the rent, excluding any service charge, must be proportionately reduced. In addition, the least must have no restriction on the talents ability to mortgage or charge the lease. Moreover, if the landlord can require the tenants to purchase additional shares, the landlord may only exercise this right on the disposal by the tenant and enterprise, which is no more than the percentage of that then market value corresponding to the share which is being acquired. And certain disposals are, of course, except such as those relations disposes on death or substances apart, or to grab a charge the least must enable the lessee toe acquire the landlord's interest on terms set out in the lease where the tenant has staircase toe 100% without the landlord being entitled to impose any additional charge on the tenant in relation to the exercise of that right on the shared on Shipley's must contain a statement that in the in the opinion of the landlord, police is excluded from the 1967 act. But very mind at that. The court has jurisdiction to dispense with this requirement if it considers that it's just to do so. In addition, there is no rights for in franchise in relation to leases for the elderly, which have been granted by a private registered provider or by registered social landlords. There's also no rights to enfranchise in relation to a shared ownership lease, whether or not granted by a housing association which complies with conditions which are set out above. And there's also an exclusion in relation to shared ownership leases of houses in what are called protected areas, regardless of whether or not they've been grabbed by a housing association, in which case the turn of must be able to staircase up to at least 80% and if the lease allows the tenant to staircase more than 80%. Hey must be required to sell his shares to the landlord auto, a housing association or two every private registered providers nominated by the landlord unless the Landel or its nominee fails to complete the purchase. Now, in the case of flats under Part one of the leasehold Reform, Housing and Urban Development Act 1993 talents occupying flats in a building, another long leases have in principle the collective rights to acquire the freehold on any superior leasehold interests which sit between the freehold on their occupational lease. Also under part one attendant occupying a flat under a long lease again has in principle the individual right to be granted a new lease for a term ending 90 years after the expiry of the term of his existing please. Now it's a necessary condition of the collective rights to enfranchise that lessees should have long leases. As I've said, a shared ownership lease is, we're almost by definition, a long lease on is included within the definition of a long lease for the purposes off the 1985 act on also the 1993 at where the tenant has staircase 2 to 100%. However, neither the collective right nor the individual rights to enfranchise is available where the immediate landlord is a charitable housing trust and where the flat, which is being provided, is provided by that chargeable trust in the furtherance off its charitable purposes. Turning to the contents of a shared ownership lease and a great many respects the terms of a shared ownership, police are no different to those of any other conventional long lease of the house or a flat. That said, there are, of course, at some elements which are unique at shared ownership. Leases on these elements are prescribed in the HCS capital funding guide as conditions which must be met if a shared ownership scheme carried on by a registered provider is to qualify for social housing grant funding those specific requirements of ours follows. The term of the lease must be at least 25 years longer than the term of the registered Social landlords Long term loan, where the term, which is held by the Social Landlords loan, is less than 55 years. The scheme cannot qualify uh, for grant funding. Secondly, the premium payable by the tenant must be a percentage of value as assessed by an independent valuer, and should initially be between 25% and 75%. Although it's sexual exceptionally, uh, the HC a make of sent to a sale which is at a discount to that value. Thirdly, the least must prohibit subletting, although there will be an absolute prohibition on sub letting. That does not mean that, in fact, the registered provider cannot re that was sub letting in individual circumstances on application can be made, and indeed registered providers do periodically agreed to subletting in appropriate circumstances. 43 and the sinking fund contribution, which is made by the tenant, must be held in trust for the tenant, along with the others other tons in the scheme. Next, with the exception of specified rule protected areas on also shared ownership leases in relation to the elderly, all shared ownership leases must allow the tenant by further shares in minimum tranches of 10% up to 100%. Any lease other than a rural protected area lease or a at least for the elderly, which contains restrictive staircase and provisions will make the scheme in eligible for grant funding. Further, HC requirement is the A. Leases granted in respect of houses and bungalows must be excluded from the franchise mint provisions of the 1967 at the 1993 out on also the common hopefully solve IT format 2002. Next, the least must have a means of reviewing bread increases. The least must provide the registered proprietor with the right of first refusal, enabling the landlord to buy the property back within a period of 21 years. From the time the land, the tenant becomes the outright owner as a result of staircase into one cent, and if the landlord chooses to exercise the option to buy back, it must acquire the property at the prevailing market value, or it must nominate another housing association to do so, and it's entitled to exercise those rights in order to secure the property. For further affordable housing use the least must require a shared owner who is looking to sell their share toe off of the property, initially at least to qualify applicants nominated by the registered provider. And if the registered provider is on the able to nominate a purchaser within eight weeks, then the tenant console the property on the market and finally the least must contain appropriate service charge clauses to reflect the requirements off the individual development. As I mentioned previously, the agency has published a number of model shared ownership leases to deal with a variety of scenarios. These are, more specifically, a shared ownership lease for a house. A shared ownership leaves for a flat, a social home by lease for either a house or a flat at a protected areas. Home lease There was a rule these again I want for a house, one for a flat. Although the HCEA has published these samples, leases that you saw them is mandatory. But as I say, the provision of certain clauses are regarded as fundamental. I don't come to those in just a moment, and they must be contained in any shared ownership links, which is granted by a registered provider as worded in the HCS relevant model lease. In order to qualify for scheme round funding, the A C A does not permit the wording of those fundamental clauses to be altered except where expressly permitted by it or in relation Teoh minor typographical changes which may be required particular circumstances If a registered provider doesn't use one of the sample leases, it must certify to the agency eight that the leases to be used will fulfill the HCS fundamental requirements. The sample leases are available on the agency's website. Three h c. A doesn't issue a sample, shared ownership leads for the elderly and simply suggests that the one of the protected areas sample leases that should be adapted appropriately. Of course, a great many registered providers having fat produce their own template shared ownership leases, which either faithfully followed the relevant provisions of the model leases. They have obtained the agency's agency's consent to a variation in terms of the fundamental clauses which are set out in the sample lease, which must be always be included. Ah, I've referred to some of these already. There are a number of others that just required to be mentioned at first of the price payable by a NASA tiny from the current shared ownership tenant must be no greater than the percentage of the market value which corresponds to the share being sold. There has to be a mortgage e protection close. It was effectively a provision which allows the mortgage e to step in on exercise certain rights in order to preserve the value of its security. If for some reason the tenant defaults relation to the payment of rent, the rent review mechanism more specifically must ensure that the red is always sufficient to service the register providers loan debt. Although the HCL Snot H A sample leads, for example, provides for upward only read reviews on the basis of increases in R P I plus North 0.5% there's nothing. Actually, there's nothing a tall mandatory about that particular formula. You could adopt any particular formula you like. You can index by reference to any particular index that you can choose. And there is a certain sentiment which says that movements in R. P I. R no particular reflection off movements in property value on the open market rental values in particular. So there's a certain amount of flexibility provided always, however, that the rent review mechanism must ensure that the amount receivable if the aggregates by the register provider is sufficient to cover its debt obligations. In addition, in terms of fundamental closes, those clauses dealing with staircase ing in the model these must those those clauses in the shed. Ownership. Please must follow the mobile clauses in the sample lease, although of course, registered providers are entitled to vary the size of shares which could be purchased at any single time by way of incremental staircases, provided that the initial share is at least 25% on provided that the tenant is able to staircase to 100% in those circumstances were 100%. Staircase is permissible in four steps or less in terms of stamp duty land tax. The tenant under shared ownership, please can elect to alter the stamp duty land tax treatment of the following transactions from what would otherwise be the ordinary position, namely in relation to the initial grant of the lease. Any substance staircase ing in which the tenant engages and, if appropriate, the transfer of the landlord's reversion re interest in the premises. Once the lieutenant has stair cased toe 100% the election has to be identified in the initial land transaction. Return, which is submitted by the talent on first acquisition Andi once made, is irrevocable. The shared ownership least should contain provisions, uh, with, uh, for discussion with the tenant as the appropriate land stamp duty land tax statement which needs to be contained in the lease in order to allow Determined to make the appropriate Este lt election if no election is made. SD lt is calculated in the usual way by reference to the premium on the specified rent on the initial grant of the lease. Next value paid for any portion, 2% on substance staircase ing and finally the value paid if relevant on a transfer of the landlord's reversion. Re interested the premises wants. The leaseholder has stair cased at 100 set the election which is available for differential STL treatment can only be made at more, particularly if certain requirements in Schedule nine of Finance at 2003 are satisfied. In particular, the election can only be made on is only available if the shared ownership leads provides for the tenant to acquire the laterals reversion. And so, of course, it can't be invoked where the leases of a flat in a block the free told, which is owned by a housing association because in that situation wants the tenant staircases to 100% he can't receive the reversion. Hey can only receive a new lease allow the terms of the existing lease will be altered. So is to remove the staircase in provision and in effect, that least will become, as it were, on ordinary long lease off the flat rather than they shared ownership least a flat. If the election is made on the initial grant of the lease, SD lt will be Kirk completed by reference to the full market value, with no reference to the actual premium. Also the specified rent. And then, of course, if you factor the election is made in stamp duty is paid on that amount. No further Este lt will be paid as and when the landlord's reversion re interest is eventually transferred to tenant, I want to turn to retirement housing on some look at some of the issues which arise in that particular context. Registered social landlords. Abrasive providers sell retirement housing on a shared ownership basis with the aid of public subsidies. Over the years, this form of housing provision has taken a variety of forms until imagination nine. The tenants of subsidized retirement housing paid a premium equal to 70% cost or value of the home, which they were buying goods occupy those leases could then only be sold or surrendered back to the landlord for a price equal to 70% of the value. At that time, the tenant couldn't acquire anything could not quite any further stake in the dwelling on no rent was payable. Since 1989 subsidized retirement housing has been sold on a shared ownership basis. At no nous shared ownership for the elderly or elderly persons shared ownership. The tenant, as in conventional shared ownership schemes, pays a premium, which is a percentage of the value dwelling, uh, the share, which the tank wire cameras low, is 25% and the time disabled further shares by staircases. As I've already discussed in the case of elderly person shed ownership, which is subsidized by social hands ground, the tenant cannot staircase above 75% and if the tenant does acquire a 75% share, the rent payable will always be milk. The conditions, which are imposed by the HC A for publicly funded schemes so far as they relate to the contents of shared ownership leases for the elderly, cover a number of areas, including the following. Firstly, there are limitations on alienation under letting is prohibited on there is limited assignment in favor of persons who must be at least 55 years of age. There is a restriction on staircase ing. As I've described above, there must be a mortgage protection clause because any mortgage e exercising a power of sale well usually want to staircase to the maximum permitted on then to sell the lease with the benefit of the maximum staircase, which is available, which means that the mortgage, of course, will have to pay the registered social landlord a percentage of the market value, corresponding to the value of the share that's being acquired. Because where market values have fallen since the mortgage E made the loan, the sale price of the 75% leased which an elderly person is entitled may well be less than the aggregate of the outstanding loan and the cost of acquiring the remaining share. In that scenario, the counselor mortgage lenders has secured agreement that mortgages must include a clause which gives the mortgage ease claims priority over those of the registered social landlord by providing that in such cases, the payment to be made by the multi G for acquiring the remaining share is to be reduced by the amount of any short for which is occasioned to the mortgage e in repayment of the loan. So, in other words, where the borrower defaults on the Mamba gee suffers a loss on ultimate loss, it is entitled to offset the amount of that loss against the amount of any enhance share that it wishes to acquire in order to be able to sell release on the market. Finally, at least for the elderly is already described must not be capable of enfranchisement under either of the 1993 act in relation to flats UH, only 1967 in relation to houses in terms of the sale of retirement housing in terms of enfranchisement. In the case of flats, tenants have a collective rights to acquire the freehold on an individual right to extend their leases or described on the 1993 act. Um, but that isn't available, as I've already said, where the landlord is a charitable house and trust, which is providing the accommodation in pursuit of its chance for objectives, and also there won't be any collective rights to enfranchise relation to the freehold dwellings where the tenant hasn't stair cased at 100%. Again, that's the effect of Section seven sections 39 off the 1993 at where the right to enfranchise the collective right to enfranchise might be exercised. Effect is to replace the landlord with the new landlord on the terms of the leases, and the rights and responsibilities of landlords and tenants don't change as a result. So that, in particular any age restriction in the leases was still subsist and should be enforced by the new landlord. And Turner's will remain liable notwithstanding at the enfranchisement to continue to contribute to the full cost of services. It may, however, be that the new landlord will have different policies and that these new policies will not necessarily be to the benefit of all the tenants. So, for example, a reduction in services were allowed on the police, maybe to the disadvantage of older frailer tenants. I may yet soup younger tenants who wish the service charge to be reduced relation to houses. The position under the 67 act is very different than applies in relation to flats. Most retirement houses are sold on a leasehold basis. Internets, therefore, have the right in principle to acquire the freehold of their dwelling. But what you get may not be available. In the case of a landlord who is a charitable house trust, uh, the effective enfranchisement by a tenant of a house is that the tunnel becomes his own landlord. Although the rights and obligations of the tenant remain unchanged, the tenant's obligations become unenforceable. That course has to serious consequences. Firstly, any restriction in the lease imposing a minimum age on occupiers will no longer be enforceable, which may well be unattractive toe other residents on or to potential purchases from those residents. And secondly, the former landlord will no longer be able to recover the tenants. Proportion of the costs of services provided to the dwellings on the estate, even though those services still have to be provided to all the other dwellings and the cost of most services will not be capable of being reduced pro rata as simply because one dwelling or more than one running on the estate no receives the which means that if the resulting shortfall can't be met from elsewhere, there's a risk that service provider will come insolvent or that service provision would be reduced. In addition, where the talent is only liable to make sinking fund contributions on a disposal or change of ownership, the enfranchisement of the least will mean that any covenant by the town to pay those sinking fund contributions will become unenforceable by the former landlord. Registered providers may take the view that the advantages of granting leases of retirement housing how weigh the risks associated with enfranchisement, especially as the incidence of enfranchisement maybe very low. The risk taken by the provider is, of course, a financial risk in other words, that the provider won't be able to recover the full cost. The services which it remains under an obligation to supply the other residents on the state. The risk taken by the purchases of leasehold houses is that as a result of enfranchisement of another dwelling on the estate, the quality of services maybe affected on the character of these state may change, affecting both the suitability of the estate. For some of the residents, at least on also the marketability of their dwellings in terms of variable service charge proportions, it's of course, perfectly possible relation. Teoh. Any lease let alone shared ownership leases to provide for the service charge proportion ah, to be variable and to increase if the number of dwellings entitled to receive the services decreases, that could clearly be unattractive. Certain tenants and some developers take the view that provisioning the leases for a variable service charge, Proportion has an act, a positively adverse effect on market value having deep marketability. Such provisions, in any event, does nothing to address the problems that may arise from the removal of any age restriction as a result of enfranchisement potentially. Finally, a provision for variation might be helps to be unfair within the unfair terms and consumer contract regulations of 1999. And so it may well be that such provisions, if it were included, my world would challenge on might be held not to be capable of being invoked by the landlord so far as regards covenants with third parties, the tenant's obligations in the least maybe expressed to be made not just with the landlord as the then landlord, but also with the other tenants on these state on with the landlord is freeholder for the estate rather than just as a landlord dwelling the enforceability of those obligations will not be affected by the lease on the reversion if they come into the same ownership but will be continued to be enforceable for so long was the least continues to subsist. But it may be in the power of the tenant to bring the least to an end by merger or surrender, and in that event, as the least will then cease to exist. Those obligations will no longer be enforceable by the other tenants on the state or by the landlord as freeholder off it. Now there are circumstances in which the tenant want to be able to bring the least one end, most notably vehicles. If the lease is subject to a mortgage, the management organization providing services to the estate may seek to protect its entitlement to payment of sinking fund contributions. By way of such a charge in order to secure a payment, often from time to time on the existence of that charge would, of course, prevent a merger taking place. The consequences of enfranchisement by a talent off the house on a retirement housing estate are potentially very serious. There are ways in which these could be averted or mitigated, one of which is that it used to be quite common for landlords to exclude the operation of the 1967 act in relation to houses by reserving in the lease rent, which was not a low rent aside previously described. The difficulty with that is in the context of retirement housing. This isn't favored by registered providers, who typically are charges who are concerned to keep to an absolute minimum the regular outgoings, which tenants have to pay. And in fact, this solution will be of no utility whatsoever, as and when and if Section 300 of the 2008 act is ever actually brought into force. Secondly, it used also to be common for retirement housing to be sold by way of non assign herbal leases, which were terminal by the tenant at any time, and by the landlord or the tenants personal representatives after the tenants death. But these have large, deformed into dis use Give that there no longer attracted to purchases on our is remarkable as a sign leases at least could provide for service charge. Proportions vary in event that a toll east, another dwelling on the state has enfranchised, but that can be unpredictable in its outcome. On the freehold of the dwelling. May before any lease of a dwelling is granted, be subjected to the same restrictions and obligations as are contained in the lease, so that on enfranchisement, the tenants position is a freeholder is no different to the position that attendant enjoyed as a leaseholder. How that is very complex on its very difficult, actually to engineer in practice in terms of non assign herbal leases on enfranchisement. The provision of non assigned herbal leases are usually at least where the leases of a house worded to so is to be excluded from the 1967 at on. I've already described the circumstances in which the 1967 act, uh, just not supply in terms of shared ownership leases, more particularly in relation to in franchise mint on the elderly. Ah, at least for the elderly, as I've said, can't be enfranchised where the landlord is a registered social handled. But there are a number of conditions if the exclusion from the right to enfranchise is to apply, and these are as follows firstly that Lise has to have been granted after the length of December 1987 by registered social landlord. The lease has to have been granted a premium, calculated by reference to absent church of the value or the cost of dwelling. The least has to contain a statement that the least cannot be enfranchised when the interest of the land belongs. For registered social landlord, the least must have been granted to a person who was at least 55 years of age at the date of grant. The least must contain a covenant by the landlord to provide the tenant with services of a warden under a system for calling the warm that must have already said to be an absolute project. Prohibition on under letting or part of the dwelling on the least, must contain a covenant by the tenant knocks to assign or part with possession of the whole or part of the dwelling, except firstly, in favor of a person who's 55 years of age or older or secondly, in the case of an assignment by the tenants, personal representatives to the tenant spouse in that situation, the tenants Miles doesn't have to be over 55. Thirdly, in the case of a sale by mortgage E. Then the parting with possession can be to whatever extent is permitted by the lease and lastly, at the least, must not contain any provisions. Uh, which, uh, allows the tent to a quiet Mandel's interest. That concludes what I wanted to say in relation. Teoh shared ownership leases a retirement housing on therefore concludes this'll webinar. All that remains is for me to thank you for listening.
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