Charities and shared ownership


Share

Questions have recently been raised on whether housing associations that are registered charities and are seeking to dispose the freehold under a shared ownership lease will be able to treat the disposal either as an exempt disposal or rely on the surveyor's procedure under s.119 of the Charities Act 2011 (the Act).

The wording of s.117(3) of the Act makes it clear that the original grant of a shared ownership lease (regardless of whether it contains provisions for 100% staircasing) is an exempt disposal and approval will not be needed for such grant.

The transfer of the freehold residual interest once a shared leaseholder has staircased to 100% equity is not an exempt disposal as it is not covered any of the exceptions s.117(3).

In order, however, to dispose of the freehold residual interest an housing association may:

  • use the surveyor's procedure under s.119; or by getting an order from the Charity Commission.
  • The surveyor's report procedure can be used only before the shared ownership lease is granted. This procedure cannot be applied retrospectively, i.e. after the shared ownership lease containing the final staircasing provisions was entered into.

It is essential, therefore, to ensure that this procedure is complied with before the grant of the shared ownership lease (assuming that such lease contains an ability to staircase to 100%). If not, consent of the Charity Commission will need to be obtained to enable transfer of the freehold.

Insight

Report: A vision for investment and future proofing the South West

Explore
News

Trowers comments: Trends at MIPIM UK

Explore
News

Trowers comments: Financing transactions – when does 'no due diligence' really mean 'no due diligence'?

Explore
Insight

Top tips to help you negotiate Heads of Terms on a New Lease

Explore
News

Trowers & Hamlins advises Octopus Real Estate on UK retirement living joint venture

Explore
Insight

Cryptoassets – Development of FCA Guidelines

Explore