Leasehold
Buying and selling your leasehold
You can become a leaseholder by buying the lease of a Council flat.
If you are already a leaseholder you are free to sell your flat without the Council's permission.
Buying
There are two ways you can buy the lease of a Council flat:
- buying the lease from the Council, under the Right to Buy Scheme (subject to certain criteria)
- buying the lease on the open market, from the current leaseholder
If you buy the lease from the previous leaseholder (an assignment), you or your solicitor must tell the Council within one calendar month.
The Council charge a legal fee to register the new owners' details.
Selling
You do not need the Council's permission to sell your flat.
However, new purchases must be registered within one calendar month.
Your solicitor should be aware of this and should send the necessary documents on your behalf.
Leasehold Pack (Enquiries)
When you put your flat up for sale, your Solicitor might require a 'Leasehold Pack' or a 'Sellers Pack'.
The Council will provide a standard leasehold / sellers pack which includes details of:
- the service charges and any arrears
- planned works and painting
- buildings insurance
Copy invoices can be provided for an additional fee or if you have kept previous invoices you can pass these onto your solicitor.
The Council charges a fee to provide the pack.
Please contact the Leasehold Team for details.
Repayment of discount
If you have bought your home under the Right to Buy Scheme you can sell it whenever you like.
If you want to sell your home within the 'discount repayment period' you will usually have to repay some or all of the discount.
The amount you repay will depend on when you made your application to buy.
If you applied for the right to buy after 18 January 2005 and you wish to sell the property within the first five years, you will have some discount to repay:
- First year: the whole discount must be repaid
- Second year: four-fifths must be repaid
- Third year: three-fifths must be repaid
- Fourth year: two-fifths must be repaid
- Fifth year: one-fifth must be repaid
- After 5 years: no discount needs to be repaid
If you sell within 5 years the discount you repay will be a percentage of the resale value of the property.
This amount won't include the value of any improvements.
For example, if your home was valued at £100,000 when you bought it, and you received a discount of £20,000, that means that your discount was 20%.
If your home is valued at £150,000 when you wish to sell it, and you want to sell within the second year of purchase, you will have to repay £150,000 x 20% discount x 4/5 i.e. £24,000.
Right of First Refusal
If you applied for the Right to Buy after 18 January 2005 and subsequently bought your flat, then prior to putting it up for sale for the first time (within first 10 years only) you will need to write to Legal Services, Town Hall and Civic Offices, South Shields, Tyne and Wear NE33 2RL and offer it back under the Right of First Refusal regulations.
The regulations lay out what you must state in your offer. These are:
- The type of property (semi-detached, terraced (mid or end) flat or maisonette)
- The number of bedrooms
- The type of central heating
- Any improvements you have carried out to the property since your purchase
Once your offer is received, Legal Services will acknowledge receipt and explain the Right of First Refusal procedure.
The Council has 8 weeks from the receipt of your offer in which to decide whether it wishes to accept or reject your offer.
The Council will also offer your property to Registered Social Landlords, who will also have to decide within that 8 week period if they wish to accept or reject your offer.
If the offer is rejected, you will have 12 months from the date of rejection to sell your property.
If you fail to sell your property within the 12 months, then you will have to re-offer the property to the Council and go through the procedure again.
If the Council rejects your offer and you find a buyer, you may have discount to repay if you are selling within the first five years of buying it.
Please refer to the above section - repayment of discount.
Service charges
You are responsible for paying your service charges for the whole of the financial year in advance.
If you sell your home during the financial year, you have to pay the service charges from the 1 April to the day the sale completes.
The person buying the property will then be responsible for the service charges from the day after the sale completes until 31 March.
Your solicitor should work out what each party will need to pay, called apportionments.
The outstanding amount should be paid on completion to the Council by one of the solicitors.
Passing on the lease if you die
When you die, the right to your lease will normally pass to your nearest family member unless you have said otherwise in your will.
If you die without leaving a will that gives clear instructions about who the property should go to, the courts will deal with your estate.
The discount repayment clause does not apply in these circumstances.
Once the property is transferred to a family member, if they choose to sell and the property is within the 'discount repayment period' or within the first ten years, then they will have to repay discount and / or offer the property back to the Council under the Right of First Refusal regulations.
Staying in your home
You are secure in your home as long as you keep to the terms of the lease.
Only a court can allow your home to be taken from you.
This could happen if, for example, you failed to pay your service charge, or mortgage, or you knowingly made false statements when you applied for the lease.
More information
If you bought your flat under the Right to Buy Scheme and need more information, see after buying my Council home.