9  Post Sales Procedures

9.1  General

9.1.1 The Post-Sales issues are the same as for RTA for repayment of Discount and disregarding the resident’s improvements.

Staircasing

9.1.2  Staircasing issues are as per New Build HomeBuy.

9.1.3 However from April 2008 further Social HomeBuy discounts will be available when staircasing. The available discount will be calculated on a pro rata basis based on the RTA discounts.  For example if a further 40% share is to be purchased then a further 40% of the applicable discount would be available.

For a worked example follow the asterisk  

 

9.2 Repayment of Discount

9.2.1 See RTA section 5.2

9.2.2 RSLs must remember that prior to April 2008 the Discount received by the leaseholder will have been a part of the total discount available if they bought less than 100% at Initial Sale. The repayment provisions therefore apply to this (part) discount only.

9.2.2a From April 2008 when subsequent discounts are available they will also be subject to repayment provisions when the property is sold. The principles on how to calculate the amount repayable will be the same as those for RTA 5.2.3, that is a link to the property value. Each discount will be subject to its own 5 year repayment period.

For an example follow the asterisk  

 

9.2.3 Disregard of improvements value

For detailed Requirements see RTA 5.3.5 & RTA 5.3.6.

9.2.4 Deferred resale agreements

See RTA 4.12.1

9.2.5 Exempted disposals

See RTA 5.3.7

9.2.6 The RSL must ensure that a conveyance or lease has an appropriate repayment covenant included , see section 6.5. The requirement to repay discount will rank immediately after the qualifying lending institution that has provided the tenant's mortgage). Where further lending is needed to fund essential works to the property the RSL may postpone its charge in favour of the lender. The charge should not be postponed for any other reason.

9.3 Staircasing

9.3.1   The price paid for further shares is based on the full open market value of the property. For details of further discounts available see SHB 9.1.2.

9.3.2  Other Staircasing Requirements are set out in NBHB section 7.2.
 
9.3.3  Valuation Requirements are set out in NBHB 2.3.3  

9.3.4  For details on the requirements of what proceeds should be credited to the Disposal Proceed Fund please refer to the DPF chapter. 

  
9.4  Mortgage Difficulties and Flexible Tenure 

9.4.1 Lenders may take action to repossess property if mortgage payments are not maintained ("being in default").  The Agency's Requirements on RSLs when the RSLs leaseholder is in default are set out in NBHB section 7.4.
  
9.4.2  Where the SHB purchaser reduces, but still retains part of the equity in the property  no repayment of the discount is required. However, should the SHB purchaser revert  to being a tenant within the designated repayment period, the discount is repayable.
 
9.4.3  The Requirements and opportunities for offering Flexible Tenure to leaseholders who are struggling financially are set out in Recovery section 6.6.