Problems with house sale, part ownership / mortgage etc...
Discussion
I'm not sure whether this belongs in Business, finance or Homes and Gardens, so I'll let a mod choose.
Bit of background: My grandfather worked for one firm for all of his life (45ish years). Upon his retirement the company offered a private 'mortgage' instead of them having to apply for a commercial mortgage. I'd also add that the company provided a house for them, so this was their 'first' house purchase. The terms of the 'mortgage' are that this company owns 33% of the property and my grandparents bought the remaining portion outright. However they pay a 'rent' monthly on the part that this company owns and their share does not decrease (yet it is still called a mortgage?).
My Grandfather died 5 years ago and two years ago my Grandmother (now 82) moved into a flat (it's not sheltered accommodation, but that sort of thing) which is run and managed by the same company. The property has been on the market for 2 years and 4 months. It was valued at £160,000 at the time of being put on the market. We had very little interest (more due to the time we decided to sell, according to the estate agency) in the property and now, inevitably, the value of the property has fallen. We have reduced the price incrementally and it is now on the market at £139,950.
So, so far, this company is receiving the monthly 'rent' on their portion of the property, my grandmother's rent on her flat (amounting to circa £20k p/a) and their share in the property is now worth £52,800 (their original investment was £24,750). The property's price has benefitted from various improvements (new roofing, central heating, bathroom refitting, new carpets throughout, new gas fire, fitted kitchen, fitted bedroom units and completely redecorated to sell) - of which this company have contributed the sum total of £0.00. My Grandmother is obviously still paying the bills (minimal, but still), council tax and insurance on the empty property.
We had an offer on the property a couple of weeks ago of £127,000 - despite this being a low offer my Grandmother was prepared to take it, valuing her stress levels / sanity over the amount she'd be losing. However this company won't entertain a value under £135,000 (so they're effectively quibbling over an extra £4k-ish) and flat refused. They have said they point blank will not entertain anything under £135k. The estate agency are telling us they don't think we'll be able to achieve this in the foreseeable future - this is vindicated by three independent valuations we have organised by ourselves.
The company have said they're prepared to wait as long as it takes to get the price they want. They have never even seen the property, nor commissioned anyone on their behalf to value it. They may have done at the time of purchase, I can't remember. That was in 1996. We have kept them up to date on all work carried out on the property in accordance with their terms.
It's beginning to become somewhat of too much a burden on us at the moment, financially, and the work required to keep up the property at it's current level. We have talked with this company about the possibility of us renting it out, to which again, they flat refused.
Is there anything we can do?! They won't help with the upkeep / costs towards the work carried out to the property and won't subsidise my Grandmother's rent until the property sells. We have even approached them about buying our share of the property at a low valuation - again they won't.
I know this is a bit ranty - but it's stressing us all out at the moment.
Bit of background: My grandfather worked for one firm for all of his life (45ish years). Upon his retirement the company offered a private 'mortgage' instead of them having to apply for a commercial mortgage. I'd also add that the company provided a house for them, so this was their 'first' house purchase. The terms of the 'mortgage' are that this company owns 33% of the property and my grandparents bought the remaining portion outright. However they pay a 'rent' monthly on the part that this company owns and their share does not decrease (yet it is still called a mortgage?).
My Grandfather died 5 years ago and two years ago my Grandmother (now 82) moved into a flat (it's not sheltered accommodation, but that sort of thing) which is run and managed by the same company. The property has been on the market for 2 years and 4 months. It was valued at £160,000 at the time of being put on the market. We had very little interest (more due to the time we decided to sell, according to the estate agency) in the property and now, inevitably, the value of the property has fallen. We have reduced the price incrementally and it is now on the market at £139,950.
So, so far, this company is receiving the monthly 'rent' on their portion of the property, my grandmother's rent on her flat (amounting to circa £20k p/a) and their share in the property is now worth £52,800 (their original investment was £24,750). The property's price has benefitted from various improvements (new roofing, central heating, bathroom refitting, new carpets throughout, new gas fire, fitted kitchen, fitted bedroom units and completely redecorated to sell) - of which this company have contributed the sum total of £0.00. My Grandmother is obviously still paying the bills (minimal, but still), council tax and insurance on the empty property.
We had an offer on the property a couple of weeks ago of £127,000 - despite this being a low offer my Grandmother was prepared to take it, valuing her stress levels / sanity over the amount she'd be losing. However this company won't entertain a value under £135,000 (so they're effectively quibbling over an extra £4k-ish) and flat refused. They have said they point blank will not entertain anything under £135k. The estate agency are telling us they don't think we'll be able to achieve this in the foreseeable future - this is vindicated by three independent valuations we have organised by ourselves.
The company have said they're prepared to wait as long as it takes to get the price they want. They have never even seen the property, nor commissioned anyone on their behalf to value it. They may have done at the time of purchase, I can't remember. That was in 1996. We have kept them up to date on all work carried out on the property in accordance with their terms.
It's beginning to become somewhat of too much a burden on us at the moment, financially, and the work required to keep up the property at it's current level. We have talked with this company about the possibility of us renting it out, to which again, they flat refused.
Is there anything we can do?! They won't help with the upkeep / costs towards the work carried out to the property and won't subsidise my Grandmother's rent until the property sells. We have even approached them about buying our share of the property at a low valuation - again they won't.
I know this is a bit ranty - but it's stressing us all out at the moment.
RenesisEvo said:
One thing that may help a little is that for empty properties you can be exempt from council tax for around 6 months, and thereafter is a reduced rate. Might help a little, beyond that I'm not sure what I can add, but I agree that the company is being unrealistic.
Done! She moved out two years ago, so for a year an 6 months she's had to pay it again. At the full rate.I sympathise with your situation.
They got the best years of your Grandad's life, it sounds like he was a loyal and no doubt hard working employee and then they shaft him and his wife on his retirement and subsequently after his death.
Have you had a solicitor look at the private mortgage papers to see if they are liable to still collect this 'rent' or contribute towards the upkeep of the property which they part own?
Maybe ask on here if someone could have a quick look.
They got the best years of your Grandad's life, it sounds like he was a loyal and no doubt hard working employee and then they shaft him and his wife on his retirement and subsequently after his death.
Have you had a solicitor look at the private mortgage papers to see if they are liable to still collect this 'rent' or contribute towards the upkeep of the property which they part own?
Maybe ask on here if someone could have a quick look.
GreatGranny said:
I sympathise with your situation.
They got the best years of your Grandad's life, it sounds like he was a loyal and no doubt hard working employee and then they shaft him and his wife on his retirement and subsequently after his death.
Have you had a solicitor look at the private mortgage papers to see if they are liable to still collect this 'rent' or contribute towards the upkeep of the property which they part own?
Maybe ask on here if someone could have a quick look.
The solicitor dealing with the house and (lack of) sale thereof doesn't think there's a right lot we can do with regards to getting out of anything - he did challenge the 'amount' of the property they own and tried to get it reduced but to no avail. I'll maybe have a word with him and see if he thinks it's worth pursuing with another solicitor.They got the best years of your Grandad's life, it sounds like he was a loyal and no doubt hard working employee and then they shaft him and his wife on his retirement and subsequently after his death.
Have you had a solicitor look at the private mortgage papers to see if they are liable to still collect this 'rent' or contribute towards the upkeep of the property which they part own?
Maybe ask on here if someone could have a quick look.
NinjaPower said:
I work in housing and specialise in shared ownership/leasehold and deal with this sort of thing day in day out...
Firstly, I presume this property you are referring to is Leasehold?
2/3ds of the property is properly owned by my Grandmother. 1/3d of it if owned by the company. The agreement on their part is a 'mortgage' (according to the paperwork) but their steak doesn't reduce, and my grandmother pays a 'rent' on the 1/3d that they own.Firstly, I presume this property you are referring to is Leasehold?
MrPeters said:
2/3ds of the property is properly owned by my Grandmother. 1/3d of it if owned by the company. The agreement on their part is a 'mortgage' (according to the paperwork) but their steak doesn't reduce, and my grandmother pays a 'rent' on the 1/3d that they own.
Usually with shared ownership, the actual title deeds/ownership to the freehold of the property are only in the name of one person or company, despite it being called shared.Has your solicitor actually investigated who 'owns' the property legally?
NinjaPower said:
Usually with shared ownership, the actual title deeds/ownership to the freehold of the property are only in the name of one person or company, despite it being called shared.
Has your solicitor actually investigated who 'owns' the property legally?
(Sorry I'm a complete noob in this area) but as I understand it the company hold the Deeds to the property (as any mortgage company would) but the freehold of the property is split. That's what I understood from our solicitor. I may be wrong though.Has your solicitor actually investigated who 'owns' the property legally?
MrPeters said:
(Sorry I'm a complete noob in this area) but as I understand it the company hold the Deeds to the property (as any mortgage company would) but the freehold of the property is split. That's what I understood from our solicitor. I may be wrong though.
Don't worry about it! Its a really, really complicated area and I deal with people on a regular basis who have actually owned and lived in shared ownership properties for years who don't have a clue what they own.I think, and I could be wrong as all cases can be different, what you will find is:
a)The freehold is owned by this housing company/landlord meaning ultimately they own it legally.
b)The portion you own is actually leased to you.
c)The lease is the defining document in this case, and therefore all the 'rules' such as the sales price are stipulated within the covenants of the lease.
You need to get in touch with the housing company and ask if there is a lease for the property.
If there is, then you can see what the rules are, and you can also consult this government website for help and advice: http://www.lease-advice.org/
I have to admit, its a bit much to demand that you get a firm price for the property in this economic climate. Our leases state a similar thing, that the property MUST be sold for the price originally given by an RICS qualified valuer, but we let people accept the best offers they get as its unreasonable to expect otherwise.
NinjaPower said:
Don't worry about it! Its a really, really complicated area and I deal with people on a regular basis who have actually owned and lived in shared ownership properties for years who don't have a clue what they own.
I think, and I could be wrong as all cases can be different, what you will find is:
a)The freehold is owned by this housing company/landlord meaning ultimately they own it legally.
b)The portion you own is actually leased to you.
c)The lease is the defining document in this case, and therefore all the 'rules' such as the sales price are stipulated within the covenants of the lease.
You need to get in touch with the housing company and ask if there is a lease for the property.
If there is, then you can see what the rules are, and you can also consult this government website for help and advice: http://www.lease-advice.org/
I have to admit, its a bit much to demand that you get a firm price for the property in this economic climate. Our leases state a similar thing, that the property MUST be sold for the price originally given by an RICS qualified valuer, but we let people accept the best offers they get as its unreasonable to expect otherwise.
The thing I can't get my head around is, as far as my Grandmother is concerned she 'owns' outright her share. I know she didn't do the deal and it was ultimately my Grandfather who dealt with it. But they 'bought' their share with their savings and it's acknowledged that the proceeds from the sale (after fees) will be split 33% to the company and 67% to my Grandmother. I don't know if this changes anything - as I said I have no idea!I think, and I could be wrong as all cases can be different, what you will find is:
a)The freehold is owned by this housing company/landlord meaning ultimately they own it legally.
b)The portion you own is actually leased to you.
c)The lease is the defining document in this case, and therefore all the 'rules' such as the sales price are stipulated within the covenants of the lease.
You need to get in touch with the housing company and ask if there is a lease for the property.
If there is, then you can see what the rules are, and you can also consult this government website for help and advice: http://www.lease-advice.org/
I have to admit, its a bit much to demand that you get a firm price for the property in this economic climate. Our leases state a similar thing, that the property MUST be sold for the price originally given by an RICS qualified valuer, but we let people accept the best offers they get as its unreasonable to expect otherwise.
I will do as you suggested and try and find out exactly who owns what. Thanks very much for your informed replies
MrPeters said:
The thing I can't get my head around is, as far as my Grandmother is concerned she 'owns' outright her share. I know she didn't do the deal and it was ultimately my Grandfather who dealt with it. But they 'bought' their share with their savings and it's acknowledged that the proceeds from the sale (after fees) will be split 33% to the company and 67% to my Grandmother. I don't know if this changes anything - as I said I have no idea!
I will do as you suggested and try and find out exactly who owns what. Thanks very much for your informed replies
Yep, I have people 'buy' retirement flats and houses off us with their savings, on a 70/30% share split and other % splits where we own the small percentage, but ultimately its the housing company that actually owns the property. Very confusing. Usually the people who bought flat/house will have to pay a service charge and possibly rent on the remaining portion they don't own.I will do as you suggested and try and find out exactly who owns what. Thanks very much for your informed replies
I suspect the reason they want you to get the full whack for the property is that there may be a clause in the lease that says that a certain % of the sales price must be given back to the housing company for future upkeep, so watch out for this! it might be something like 1% of the sales price multiplied by the number of years owned etc.
No problem, feel free to PM me if you want to discuss further
NinjaPower said:
Yep, I have people 'buy' retirement flats and houses off us with their savings, on a 70/30% share split and other % splits where we own the small percentage, but ultimately its the housing company that actually owns the property. Very confusing. Usually the people who bought flat/house will have to pay a service charge and possibly rent on the remaining portion they don't own.
I suspect the reason they want you to get the full whack for the property is that there may be a clause in the lease that says that a certain % of the sales price must be given back to the housing company for future upkeep, so watch out for this! it might be something like 1% of the sales price multiplied by the number of years owned etc.
No problem, feel free to PM me if you want to discuss further
Starting to make a bit more sense now!I suspect the reason they want you to get the full whack for the property is that there may be a clause in the lease that says that a certain % of the sales price must be given back to the housing company for future upkeep, so watch out for this! it might be something like 1% of the sales price multiplied by the number of years owned etc.
No problem, feel free to PM me if you want to discuss further
Thanks for spending the time to reply
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