Previous Corporation House conditions of sale

Hi

I recently viewed a house with the intention to buy to rent out. The estate agent advised it can only be owner occupied as it was previously a corporation house. He mentioned 25 years but was very unsure himself by the sounds of it.
Would a previous corporation house for sale have conditions attached for the next owner? I researched a bit and found that a charge would apply to the seller if it was sold within a certain period.

I am trying to figure out what condition would apply to the house if there was a new owner as I did not think conditions like this could be passed on.

Thanks for any replies.

dar100

[Deleted User] wrote: »

Hi

I recently viewed a house with the intention to buy to rent out. The estate agent advised it can only be owner occupied as it was previously a corporation house. He mentioned 25 years but was very unsure himself by the sounds of it.
Would a previous corporation house for sale have conditions attached for the next owner? I researched a bit and found that a charge would apply to the seller if it was sold within a certain period.

I am trying to figure out what condition would apply to the house if there was a new owner as I did not think conditions like this could be passed on.

Thanks for any replies.

It depends, if you buy it from council at reduced price, you will pay back the reduction of you sell it before a set time! There is 3 categories, 20,25, and 30 years! Each one offers a reduction on price, the higher the reduction, the longer you have to wait to escape the claw back

Hi

Apparently its a private sale. The house is in complete need of renovation and would bring the total cost to near other asking prices in the area.

I asked the estate agent was it a private sale and he said it was but he kept referring to owner occupier and the 25 year rule

dar100

[Deleted User] wrote: »

Hi

Apparently its a private sale. The house is in complete need of renovation and would bring the total cost to near other asking prices in the area.

I asked the estate agent was it a private sale and he said it was but he kept referring to owner occupier and the 25 year rule

If it is a private sell off an individual that owns it then the rules don't apply as you are getting it at market value, but more importantly it's nothing to do with council

surrender monkey

If the property in sale was a previous tenant purchase from a local authority then the sale is subject to the provisions of section 90 of the Housing Act 1966. I.e: the local authority tenant purchased their property under a tenant purchase scheme.

There are restrictions imposed on the subsequent sale or remortgaging of the property. These restrictions are imposed for20 years in the case of a freehold title and 25 in the case of a leasehold title. The vendor (tenant purchaser) must show that they will be purchasing another property / taking care of their housing needs. The purchaser must be a person in need of housing and not hold other property.

If this is the case in relation to the property you're bidding on, then the estate agent is correct and you won't qualify to purchase this property as the local authority will not give consent to the sale.

surrender monkey

dar100 wrote: »

It depends, if you buy it from council at reduced price, you will pay back the reduction of you sell it before a set time! There is 3 categories, 20,25, and 30 years! Each one offers a reduction on price, the higher the reduction, the longer you have to wait to escape the claw back

That's the new incremental house purchase scheme. Older tenant purchase schemes for social housing did not operate A clawback. Affordable housing had a claw back provision however!

surrender monkey

surrender monkey wrote: »

If the property in sale was a previous tenant purchase from a local authority then the sale is subject to the provisions of section 90 of the Housing Act 1966. I.e: the local authority tenant purchased their property under a tenant purchase scheme.

There are restrictions imposed on the subsequent sale or remortgaging of the property. These restrictions are imposed for20 years in the case of a freehold title and 25 in the case of a leasehold title. The vendor (tenant purchaser) must show that they will be purchasing another property / taking care of their housing needs. The purchaser must be a person in need of housing and not hold other property.

If this is the case in relation to the property you're bidding on, then the estate agent is correct and you won't qualify to purchase this property as the local authority will not give consent to the sale.

Thanks

This could be the case so. Seems a bit bizarre that these restrictions can continue onto the next potential purchaser

surrender monkey

[Deleted User] wrote: »

Thanks

This could be the case so. Seems a bit bizarre that these restrictions can continue onto the next potential purchaser

The restriction is only that the consent will not be granted if the intended purchaser is a person not in need of housing, after the sale completes that restriction doesn't carry on to subsequent purchasers....