Shared Ownership Schemes

Background

A shared ownership scheme is simply a special form of pro indiviso ownership. Such schemes were devised in the 1980s by a number of building developers. They have more recently been instigated by some housing associations for the benefit of their tenants, some employers for the benefit of their employees and more recently for social housing. The essence of the scheme is that the purchaser acquires title to a pro indiviso share of the property, with the scheme operator retaining title to the remaining share. The purchaser also enters into a private contract (which is not registrable) with the scheme operator, to regulate:

the purchaser’s right of exclusive occupation of the property; and
the circumstances in which the purchaser may acquire title to further pro indiviso shares in the property.

In general terms, the Keeper will as far as possible implement the procedures in pro indiviso shares where applications under a shared ownership scheme are presented. However, a consistent approach to the schemes operated by any single scheme operator is desirable. For instance, individual operators of such schemes may have a preference as to whether, on a sale of a pro indiviso share inducing first registration, the operator’s retained share will be voluntarily registered.

Points to Consider

Title to whole property with scheme operator

1	Scheme operator's title in Sasine Register	Disposition of pro indiviso share	Title sheet will be created for pro indiviso share only, unless a request is made for registration of the scheme operator's interest

2	Scheme operator's title in Land Register	Disposition of pro indiviso share	Where the property forms part of a development, remove whole interest in the specific property to new title sheet.

Title to property already held jointly between Housing Association and co-owner

1	Both scheme operator and co-owners' titles in Sasine Register	Disposition of further pro indiviso share to co-owner	Title sheet to be created for new pro indiviso share only, unless applicants and/or scheme operator request registration of their respective interests.

2	Scheme operator's title in Sasine Register and co-owners title in Land Register	Disposition of further pro indiviso share to co-owner	Add further pro indiviso share to title sheet for co-owners existing interest only, unless a request is made for registration of the scheme operator's interest

3	Scheme operator's title in Land Register and co-owners title in Sasine Register	Disposition of further pro indiviso share to co-owner	Remove whole interest in the specific property to new title sheet. The Proprietorship Section will reflect the respective registered shares of both the scheme operator and the co-owner. The co-owners share, recorded in Sasine Register, should not be reflected in the Proprietorship section unless the applicant requests registration of such share

In the event of the co-owner of the property transferring only their existing pro indiviso share, no enquiry should be raised about the scheme operator's interest. If the interest being transferred is already registered, the position with the scheme operator interest will have been considered when this was first registered. Accordingly, either the existing title sheet will be updated to reflect the new proprietor, or, if prior title was in Sasines, a new title sheet will be opened in respect of only the pro indiviso share currently being transferred.

Property Section

If title to the whole of the property is not being registered, add the following note (MC1) to the Property Section:

The above property is registered in this Title only as regards the total of pro indiviso shares in the Proprietorship Section.

Proprietorship Section Entries

The respective titles of the operator and the purchaser will be reflected in the proprietorship section of the new title, e.g.:

Entry	Proprietor	Date of Registration	Consideration
1.	Scheme operator (designation) to extent of 1/2 pro indiviso share	3 May 2007	£1,000,000 in respect of the whole subjects in this Title and other subjects Entry 6 Apr. 2007

2.	co-owner(s) (designation) to extent of a further 1/2 pro indiviso share	10 Jun. 2009	Consideration £6000 Entry 12 May 2009

Securities Section Entries

Consideration has to be given to whether there is an existing standard security by the scheme operator. In all instances it is to be expected that this will be disburdened to the extent of the pro indiviso share sold. If there is a security, in situations where the scheme operator's title is not being voluntarily registered, the securities section of the new title sheet will remain silent as regards this security and only any charge created by the individual proprietor will be shown. In instances where the scheme operator's title is being registered, any standard security by them should be reflected in the securities section as follows:

Entry		Date of Registration
1	Standard Security by said Scheme operator to ANY OLD BANK (designed), over the subjects in this Title and other subjects Note : The above Standard Security has been disburdened as regards a 1/2 pro indiviso share of the subjects in this Title, conform to Deed of Restriction, registered 10 June 1982	3 May 2007

2	Standard Security by said co-owner to WELL KNOWN BUILDING SOCIETY (designed) over 1/2 pro indiviso share of the subjects in this Title	10 June 2009

As the securities are technically over different subjects, there is no competition in terms of ranking. If the scheme operator's title is in Sasines then the scheme operator security will be recorded in that register. If the scheme operator voluntarily registers its interest the security will be brought forward in accordance with the guidance on Entry for Outstanding Heritable Security and there will be no registration date against the scheme operator security.

If there is no disburdenment of the scheme operator security then it will be disclosed as a prior ranking security.

Developer's Interest - Further Considerations

When the whole interest in a property has been transferred to a new cadastral unit, following a disposition of a pro indiviso share, consideration must be given to the processing of any further applications affecting the scheme operator's interest. In most instances this is likely to be a discharge of an existing standard security or the grant of a new security.

If such an application is received prior to the sale by disposition, the application will be registered against only the scheme operator interest and only one fee will be charged.

If an application is received after any sales the requirements are dependant on the date any new cadastral units for an individual property has been created. If a new cadastral unit has been set up for the individual property then it is the date on which that cadastral unit was created which will be the deciding factor. If a subsequent application is received within 28 days (or if the deed was executed 28 days or more) prior to the new cadastral unit being created then the Applicant could not have been aware of the creation of any new title number. In this instance, if the deed affects both the development and new cadastral unit, applications should be created against the development title and any other relevant title numbers. A fee will only be charged in respect of the main development application only.

If any new application does not fall within the 28 days, the deed should make reference to all the relevant title numbers and additional fees are required for each title number affected. If the deed (or application form) does not make reference to any new cadastral unit numbers, the application should not be rejected but should only be given effect to against the title number(s) quoted in the deed (or narrated on the application form).