40.1 Background

A shared ownership scheme is merely 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, and some employers for the benefit of their employees. 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 will not be registered in the Land Register) 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.

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40.2 Points to Consider

40.2.1 Title to whole property with Housing Association

1	Housing Association title in Sasine Register	Disposition of pro indiviso share	Ask if Housing Association wishes its interest in house registered as well – if it does issue 2 land certificates

2	Housing Association title in Land Register	Disposition of pro indiviso share	Remove whole interest in subjects to new title sheet – issue 2 land certificates

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

1	Both Housing Association and co-owners' titles in Sasine Register	Disposition of further pro indiviso share to co-owner	Recommend voluntary registration of applicants other pro-indiviso share and ask if Housing Association wishes its interest in property (if any) registered as well – if so issue 2 land certificates

2	Housing Association title in Sasine Register and co-owners title in Land Register	Disposition of further pro indiviso share to co-owner	Add to title sheet for co-owners existing interest and ask if Housing Association wishes its interest in property (if any) registered as well – if so issue 2 land certificates

3	Housing Association title in Land Register co-owners title in Sasine Register	Disposition of further pro indiviso share to co-owner	Remove whole interest in subjects to new title sheet and recommend voluntary registration of co-owners existing interest – issue 2 land certificates

In the event of the co-owner of the property transferring only their existing pro-indiviso share, no enquiry should be raised about the housing association interest. If the interest being transferred is already registered the position with the housing association 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.

40.3 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.	A B Housing Association (designation) to extent of 1/2 pro indiviso share	3 May 2007	£1,000,000 in respect of the whole interest registered under this title and other subjects Entry 6 Apr. 2007

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

40.4 Charges Section entries

Consideration has to be given to whether there is an existing standard security by the housing association. 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 housing association's title is not being voluntarily registered the charges 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 housing association title is being registered any standard security by them should be reflected in the charges section as follows.

Entry		Date of Registration
1	Standard Security by said A B Housing Association 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 C D 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 and no schedules will be necessary. If the housing association's title is already registered then there will be an existing charge certificate for the housing association security under the parent title, therefor another will not be prepared. If the housing association's title is in Sasines then the housing association security will be recorded in that register. If the housing association voluntarily registers their interest we will not invite registration of any security in the Land Register. The above example will show the recording date in accordance with "Entry for Outstanding Heritable Security" (9.4.2 of charges section) and there will be no registration date against the housing association security.

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

The Charge Certificate for the individual's share will be created as normal, and the Certificate cover amended to read " The within-mentioned Charge has been registered against a 1/2 pro indiviso share of the subjects in the above title."

40.5 Developer's interest - further considerations

When the whole interest in a property has been transferred to a fresh title sheet, following a disposition of a pro indiviso share, consideration has to be given to the processing of any further applications received affecting the housing association 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 sales by disposition the application will be against only the housing association interest and only one fee will be charged.

If the application is received after any sales what is required will be dependant on whether the title sheets for the individual properties have been issued. If we have not yet issued the land certificates for the individual titles then one fee will be accepted and the deed only requires a conveyancing description relating to the housing association interest.

If land certificates have been issued for the individual titles (in accordance with policy as published in the practice book) then the applicant will be aware that the housing association interest is held on different title sheets. Any subsequent deed should make reference to all relevant title numbers and additional fees are required for each title sheet affected.

End of Topic

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