Terms and conditions and guidance notes, financial and purchasing, and things you need to know
Before you reserve your new home
- The marketing literature provided to you is for guidance purposes only and the tenure of any of Sovereign’s properties neighbouring your new home may, at any time, be subject to a change i.e. from Shared Ownership to a rented tenure.
- CGIs may depict typical Sovereign Living properties at the development. Photography of interiors are for illustration purposes only and may not reflect actual interior finishes. Any reference to deposit amounts is calculated on a mortgage lender with a 5% deposit requirement over a 25 year borrowing term.
- You need to inform us if you have any pets, as pets are not allowed under the terms of the Shared Ownership lease of a flat or maisonette [without specific consent]. Usual domestic pets are only permitted in houses.
- You will have been financially assessed by one of our independent panel of Financial Advisors using the Homes and Communities Agency affordability calculator. The calculator assumes a mortgage rate of 6.5%. The monthly mortgage payment, monthly rent payable on the share you do not own and any other committed monthly payments you may have i.e. car loan, credit cards, must be 45% or less of your net household income in order for us to agree that you can proceed.
- The properties are valued by an independent chartered surveyor every 3 months. If you are approved to reserve a property, to hold the price you will need to exchange contracts by the Deadline Date. This also applies to any properties purchased off plan. After that point, if the property price is adjusted, you will be required to pay any increase in value and your application will be reassessed. If your application then doesn’t meet the financial requirements necessary to meet the new value of the property, you will be unable to purchase the property. In any event Sovereign reserves the right to withdraw the reservation if contracts are not exchanged by the Deadline Date.
- If you have received a county court judgement (CCJ) registered against you, please declare this when you are obtaining mortgage advice. The CCJ(s) must have been satisfied and you must be able to provide a certificate of satisfaction.
- If you do not require a mortgage, we will need the following documents to verify your earnings:
- 3 months bank statements for every account
- 3 months payslips
During your purchase
- You will need a solicitor. We strongly suggest that you obtain full written quotes before instructing your chosen one. Furthermore, previous customers have generally had a quicker and smoother purchase when using a solicitor who has dealt with Shared Ownership before. In addition to the conveyancing charge, disbursements may be charged i.e. searches, telegraphic transfers of money, land registry etc. Conveyancing charges will differ from one solicitor to another. You will be asked to supply funds for your searches immediately; most other costs will be payable on completion of your purchase. You will also have to pay an Engrossment fee to our solicitors for preparing the lease and a Notice fee to Sovereign for registering your mortgage.
- Your mortgage needs to be from a recognised high street mortgage lender. Before receiving advice from an IFA you should ask if there is a charge. The amount of your mortgage should not exceed the percentage of the property you are buying. We will not accept a mortgage guarantor.
To ensure your mortgage application is not delayed, please ensure that you are registered on the local electoral register. You can find the contact details for your local office on this website: http://www.aboutmyvote.co.uk/default.aspx
- The property will be reserved for a maximum period of 6 weeks from the deadline date. Your exchange deadline date will be issued when the draft contract documentation is issued to your solicitor. In the event that contracts have not been exchanged by the deadline date we reserve the right to withdraw the reservation. We will then remarket the property which may be at an increased price.
- You have the right to withdraw from your purchase at any time before contracts are exchanged. Please note that if you withdraw from the purchase for any reason whatsoever before contracts are exchanged, or if you fail to exchange contracts by the deadline date, then you agree that we will retain the sum of £200 from your reservation deposit towards our administration costs and legal expenses incurred.
- Provided the matter proceeds to exchange of contracts and completion, the £250 reservation deposit will be used in part payment of the final price that you pay for your new home. Until you exchange contracts, your purchase is subject to contract.
- You will be responsible for all costs incurred whether or not the matter proceeds to exchange of contracts and completion including all costs relating to your mortgage arrangements and to extending your mortgage offer.
- Where construction of the property is not finished by the exchange deadline date we will require contracts to be exchanged with completion on 10 days’ notice. Where the property is finished by the exchange deadline date we will exchange contracts with a fixed completion date and we will require you to complete no later than 10 days after contracts have been exchanged.
- In the majority of cases Sovereign will have contracted to purchase the property from a developer. In some cases the legal transfer of ownership to Sovereign and registration of title at the Land Registry may not have been completed at the time of reservation or by the deadline date. We will still require you to exchange contracts by the deadline date. The details will be set out in the contract pack sent to your solicitor.
- The special conditions of your purchase are detailed on the online reservation form. Upon signing the reservation form and paying the reservation deposit you are agreeing to the special conditions.
- The first month’s rent plus any apportionment due when you move in will be collected by your solicitor on completion. Please note you could be asked to pay a maximum of 2 months’ rent in advance, depending on your completion date.
- If you have reserved your new home off plan, all viewings will be subject to the developer’s approval to grant safe access to the site. The timescales given for viewing arrangements may be subject to change.
- We strongly advise you not to make arrangements to vacate your present accommodation. You must seek advice from your solicitor before you do so to ensure that contracts have been exchanged and a date has been fixed for completion of your purchase.
- Stamp Duty Land Tax (SDLT) - For information and advice please speak directly with your solicitor or contact HM Revenue & Customs.
- Service Charges may apply to some developments, an estimated breakdown is available.
- For data protection, if you are purchasing as a single applicant, please advise us in writing of anyone you wish us to liaise with on your behalf if you are not available.
After you’ve moved in
- Rent is payable on the share you are not purchasing and will be debited from your account on the 1st of each month. You will be asked to complete a Direct Debit form on completion.
- If you can foresee or experience problems in paying the rent and/or mortgage you should notify Sovereign immediately. Late payment of rent or mortgage is serious as this will accrue arrears and could result in your home being repossessed.
- The rent will increase annually on the 1st April each year. The increase will be based on the Retail Price Index figure for the September prior to the increase plus 0.5%.
- Building insurance will usually be covered by Sovereign Housing Association and is in addition to your rent. A summary sheet will be provided to you on completion. Sometimes insurance may be covered by an external management company and your solicitor will be given details. We strongly advise not to store items in the loft space as this may invalidate your insurance.
- Alterations or additions are very rarely allowed to a shared ownership property. You must always ask the Leasehold Team at Sovereign for permission if you are thinking about making any. You should be aware that there is no guarantee that the amount you spend on improvements will be reflected in an increased value for your home and Sovereign may share any increase in value on a sale of your share
- Leaseholders have full responsibility for maintenance and repairs to the home. The developer will normally have a six or twelve-month aftercare policy covering any building defects. The six or twelve month period begins from the date the properties were handed over to Sovereign. This may be earlier than the date Sovereign hands the property to you.
- Under the terms of your lease Shared Owners may not rent or sub-let their rooms.
- Your lease allows you to borrow extra money against your property only to;
- Change or transfer the names on your mortgage
- Buy more shares in your property
- Make essential repairs to your home that are not improvements
- You may not re-mortgage to pay off debts or to buy goods.
Buying extra shares
- You can buy further shares at any time following completion, this process is called ‘Staircasing’. A RICS (Royal Institute of Chartered Surveyors) registered valuation report is required in order to agree the open market value of the property at the time of the request and you are responsible for the cost of this valuation. Share will be calculated in relation to that valuation. Once you purchase additional shares your rent will decrease as you own more of the property. The rent % calculation however will still remain the same. You can buy a minimum of 10% each time you buy further shares. Administration and legal costs will apply. In some cases however, your lease will cap the maximum share you can purchase through Staircasing.
- If you complete the Staircasing process up to 100% and then decide to sell, you must first offer the property back to Sovereign at the current RICs market value as Sovereign can choose whether or not to nominate a buyer or buy the property back. This condition applies for 21 years following a 100% staircase.
Selling your home
If you choose to sell your share of the property, in accordance with your lease, Sovereign is allowed up to eight weeks to find and approve a suitable purchaser. The purchaser will need to be financially assessed in the same way you were when you purchased your home. This may mean that Sovereign will not be able to approve all interested parties. If a purchaser is not found within this timescale you can sell the property on the open market at the valuation price through an Estate Agent. Administration and legal costs will apply.
Right to Buy
We may share your National Insurance number in order to prevent and investigate tenancy and right to buy applications fraud.