Section 106 Agreement Shared Ownership

As housing prices continue to rise, many individuals and families find themselves unable to afford to buy a home outright. Shared ownership schemes exist to bridge that gap. The government-supported program allows potential homeowners to purchase a portion of a property and pay rent on the remaining portion. However, shared ownership buyers need to be aware of the section 106 agreement that comes with it.

A section 106 agreement is a legally binding agreement between a developer and the local council. The agreement outlines the developer`s obligations, which can include the provision of affordable housing or contributions to community infrastructure. When it comes to shared ownership properties, developers may be required to offer a certain percentage of the homes as affordable housing and negotiate the terms of the shared ownership lease with the council. This agreement has a significant impact on the shared ownership buyer`s rights and responsibilities.

One of the most important aspects of the section 106 agreement for shared ownership buyers is the restriction on subletting the property. Shared ownership buyers own a portion of the property and have the right to live in the home. They cannot, however, rent out their portion of the property without first obtaining permission from both the housing association and the local council. The section 106 agreement ensures that the property remains available for those who need it most.

Another critical aspect of the section 106 agreement for shared ownership buyers is the obligation to pay maintenance and service charges. As the local council often sets the terms of the shared ownership lease, buyers need to carefully review the terms regarding service charges and what they cover. These charges can include things like cleaning shared spaces, repairs, and upkeep of the building.

Additionally, shared ownership buyers need to be aware of the potential for future restrictions on the property. Section 106 agreements can include clauses that limit the buyer`s ability to make changes to the property or sell it at market value. Buyers should thoroughly review the agreement and understand the potential long-term restrictions on their investment.

In conclusion, while the section 106 agreement can seem complicated and daunting, shared ownership buyers should take the time to review and understand the document fully. It is crucial to understand one`s responsibility as a shared ownership buyer and be aware of the potential long-term limitations associated with the agreement. By doing so, they can make informed decisions and enjoy the benefits of homeownership.