After-sale shared equity procedures: guidance
Guidance to cover after-sale procedures in relation to Scottish Government’s various shared equity schemes.
Where the shared equity owner wishes to sell, this can take place at any time unless there is a Golden Share in which case Scottish Government Guidance Note 2011/03 - Low-cost Initiative for First Time Buyers (' LIFT') Buy-Backs & Re-sales -shall apply ( http://www.scotland.gov.uk/Topics/Built-Environment/Housing/investment/guidancenotes/GuidanceNotes2012/HSGN201211)The RSL should send a letter/email to the owner with disclosure mandate in terms of the correspondence in Annex 4(A) and await a copy of the property schedule and Home Report.
All shared equity owners are responsible for their own selling costs and they should ask their solicitors for details of their fees as well as all other fees and the cost of all searches, registration dues and all other outlays. The fees of the shared equity owner's solicitor are not to be deducted from the proceeds that are due to be returned to Scottish Ministers. While this should be clear to shared equity owners from the correspondence which is sent to them, the RSL should be alert to the possibility that owners or their solicitors may nonetheless seek to progress the sale transaction on the basis that the owner's legal fees will be deducted from the sale proceeds before the balance of the proceeds is returned to the RSL, and should seek to clarify and insist upon the correct position in all contact with the owner and their solicitors.
If in discussions with a selling owner or their solicitors it becomes clear that the owner will have difficulties in paying the legal fees and other costs incurred by the owner in connection with the sale and that the sale might only go ahead if fees and costs are paid from the balance which would otherwise be due to be repaid to the RSL or Scottish Ministers, the RSL should raise the issue with the relevant Scottish Government More Homes Division area team. (A template email has not been provided to cover this scenario as it is not one which Scottish Government would expect to arise frequently, nor should owners be given the impression that there are circumstances in which their fees and costs might be deducted from the proceeds which are repayable to Scottish Ministers.)
The RSL should also obtain from the Valuer a copy letter of reliance in favour of Scottish Ministers or the RSL (dependent on whether shared equity was provided pre- or post- 6 April 2008) in the form set out in Annex 4(E) together with a copy of the marketing particulars or schedule for the property. If the property sale price is at least 95% of valuation (as read with the letter of reliance), and is at the highest price offered then the sale of the property may proceed. Valuations will be valid for a 6 month period from the date of issue and after this a refresh will be required.
If the proposed price is (a) less than 95% of Valuation, or (b) has been affected by any of the assumptions and disregards in the shared equity agreement, the RSL will be required to seek approval from the relevant Scottish Government More Homes Division area team in terms of the email set out in Annex 4(F).
The RSL should send to the relevant Scottish Government More Homes Division area team an Open Market Sale Form set out in:-
- Annex 4(H) (Annex L in the OMSE Administrative Procedures);
- Annex I in the NSSE Administrative Procedures;
- Annex K in the Administrative Procedures for the Help to Buy (Scotland) scheme;
- Annex H of the Operational Guidance for the NSSE with Developers scheme as set out in Guidance Note HIGN 2011/01.
The RSL should arrange for the capital receipt to be returned to the relevant Scottish Government More Homes Division area team.
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