Why are shared ownership customers responsible for paying for major structural works within their home?

 Shared ownership properties are usually leasehold, meaning that shared owners are leaseholders. Being a leaseholder is one of the main ways to own a home. The lease makes the shared owner the homeowner and they are responsible for all the repairs and maintenance in their home, including major structural works and major repairs. This is the case with all leasehold properties, where the sharing of cost is stipulated in the lease. 

Legal view: Trowers & Hamlins

A shared ownership Leaseholder purchases the full leasehold title to their home and enters into a lease contract with the Landlord to document the terms of their ownership of the property and their payment arrangements with the Landlord. The 'shared ownership' element of the contract with the Landlord refers to the agreement for the shared owner to purchase a full legal interest in their property while initially only paying an agreed percentage of the full purchase price. The rent payment detailed in the lease covers the Landlord's cost of financing the percentage value of the property that the shared ownership Leaseholder has not yet paid for.

As the Leaseholder owns the full legal interest in their lease they also take on full responsibility for the property and agree to pay for the full costs of repairs and maintenance. This is a similar position to a standard buyer who purchases a full legal interest in their home but agrees to pay a monthly payment to their mortgage lender in return for borrowing money to fund the purchaser price. In a standard purchase, the buyer accepts full responsibility for their property, including payment of any service charges but will pay a portion of any sale price to their mortgage lender in order to repay the money they have borrowed. The shared ownership product creates a different relationship with the Landlord and the balance of the value of the property remains with the landlord but the principle of full ownership passing the buyer is the same.

Further, the shared owner has the same benefits and rights in relation to the common parts as any other leaseholder. 

Who to speak to

Ella Cheney, Shared Ownership Programme Manager