Question re selling or buying out a shared ownership or affordable property

V

vixter

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Hi all, I bought a shared ownership property five years ago. The MV was 260,000 at the time or and I got it at a discount price of 200,000. The Council own 1/3 of the property. I have had the property on the market for a good few months. It does not look as if it is going to sell any time soon so I am considering my options.

I have two questions:

1. If the most I was offered was say, 175,000, does the Council take some of the 25,000 loss as they do own some of the property?
2. If I went down the route of buying out the Council's share and transferring to a full mortgage via one of their Home Purchase Loans, could I make them an offer on their share based on the fact prices have significantly fallen e.g offer them 60,000 for their approximate 70,000 share?

I hope this makes sense!

Thanks
 
I asked DCC question #1 recently and their answer was No. They get back the full whack of their share of the property and you swallow the loss.
 
Thanks for the reply. All the documentation I have assumes rising prices, there is no mention of what happens in this case. Did they refer you to any of the paperwork or give you an explanation? The more I think about it the more I think they have to share some of the loss, it is shared ownership afterall and they are quick to take profit when it is there. Anyone else any views?
 
No this is all they said:

In the event of the sale of your property, the borrower is responsible for paying back the total amount of the remaining loan to Dublin City Council i.e., Rental Equity + Loan. If the sale of the property is lower resulting in negative equity, the borrower must still pay the remaining loan to Dublin City Council.
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I don't really see why they would have to share some of the loss, unless the contract was written in a way that specified that they would. Which, as far as I can tell, it isn't.
 
I suppose the reason I think that they would have to share the loss is that the fact that they share the ownership of the property with me. If it was a purely affordable property it would be just mine and if I was selling at a loss it would be my problem.

I am not sure they envisaged the situation where losses would be made by any party.

Brooklyn, did they take long getting back to you about it?
 
vixter said:
I suppose the reason I think that they would have to share the loss is that the fact that they share the ownership of the property with me.
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But it's obvious that doesn't mean that you and they have a 50/50 right to everything. They can't move in with you, or give their relatives a key. They can't just decide to sell their share to someone else entirely. The terms of their ownership and yours are set out in the contract you signed with them, and I assume your contract says more or less what DCC quoted me above. Mine does, although it's in legalese (hence my asking them to clarify it!).

did they take long getting back to you about it?
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No but I'd been in communication with them back and forth for a while about things.
 
I agree with brooklyn on "loos share by cc".
There is another interesting think I found, in Dublin you have an option of swithing to full mortgage in Shared Ownership so instead of paying half mortgage and half rent (approximately) of the total monthly payment you can pay mortgage only. In Cork there i no such option, you can not take full mortgage from county council, and in the current market situation (if you property is in negative equity) you will not get loan from bank to pay out council; you are stuck with paying mortgage and rent....
what is your opinion on this?
Thanks
Skier
 
can you tell me what is the rent you pay in such a case (e.g. 99% to 1%), I believe it is only a small portion of the total monthly payment
 
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