Shared Ownership & Leasehold Management Policy

This policy shall apply to the following leasehold properties: 

• Shared ownership and Do it Yourself Shared Ownership properties
•  Leasehold Schemes for the Elderly (LSE) properties
• Outright Leasehold properties where YHG own the freehold or the intermediate leasehold interest
• Leasehold Properties bought under the Right to Buy (RTB) and Right to Acquire (RTA). 

YHG – Your Housing Group Limited, which shall include:  

• Your Housing Limited
• Frontis Homes Limited
• Outlook Homes Limited
• ‘Leaseholder’ includes references to leaseholders, lessees, and shared owners
• Leasehold refers to property held under a long lease where the leasehold interest held by the leaseholder is 100%
• Shared Ownership – Is a low-cost home ownership scheme which allows purchasers to buy a share of a property and pay rent to YHG in relation to the remainder, pursuant to the terms of shared ownership lease
• Staircasing – this is a process which allows shared ownership leaseholders to buy all or some additional shares in their home as and when they can afford to do so
• The staircasing provisions are detailed within the relevant shared ownership lease
• Flexible Tenure – An initiative supported by Homes England designed to enable a shared ownership leaseholder (not an outright leaseholder) to remain in their home either by selling some of their shares back to their landlord to reduce their mortgage to a more affordable and sustainable level, or by selling all their shares back to the landlord and becoming a tenant. This is also known as downward staircasing but will 
  usually only be considered in exceptional cases where there is financial hardship and as a last resort
• Market Value – Is the value of a property on the open market, this is usually established by an independent valuer.

Consultation has taken place with:

• Key internal stakeholders including Housing Management, OPS, Asset Management, Charge Setting, Commercial Housing and Governance teams
• Leaseholders via YHG’s customer involvement framework
• YHG’s Legal Panel.

This policy is linked to the Transparency, Influence and Accountability Standard. 

YHG currently owns and manages circa 3000 leasehold properties. Failure to manage and maintain YHG’s Shared Ownership and Leasehold properties in accordance with the relevant leases and legislative requirements may result in action being taken against YHG 
which could have a financial and reputational impact on the organisation. 

The Leases

6.1.1 YHG will make information available to all prospective leaseholders relating to their rights and obligations as leaseholders but will explain that they need to seek independent legal advice before committing themselves to signing a lease. 

6.1.2 All leases issued by YHG will include information regarding: 

• The service charge to be paid, how it has been determined and when payment is due
• What the arrangements are for collecting the service charge
• The procedures for leaseholders to assign the lease
• The procedures for leaseholders to purchase additional shares (shared ownership leases only)
• The circumstances in which YHG may end the lease
• The details of the respective responsibilities of the leaseholder and of YHG for repairs and maintenance to the property, including (where applicable) the structure and common parts
• Where applicable, it will identify whether YHG is responsible to maintain flat entrance doors, and shared ventilation, fire detection systems (both the flat detection and the communal detection that may link to the flats)
• The responsible use of balconies (where applicable)
• The amount of any rent payable, be it shared ownership rent (referred to as Specified Rent) and/or ground rent. 

6.2 Changing the terms of a lease 

6.2.1 The lease can be altered by a “Deed of Variation” if all parties agree. Alternatively, only one of the parties to a lease can seek a variation under Part IV of the Landlord and Tenant Act 1987 by application to the First-tier Tribunal (Property Chamber). This would require at least one of the grounds under Section 35 to be satisfied and these are set out at 6.2.2 below. 

6.2.2 An individual party to a lease can make an application to a First-tier Tribunal (Property Chamber) to vary the lease under the provisions of Part 4 Section 35 of the Landlord and Tenant Act 1987. However, the grounds for a compulsory lease variation are limited.

The grounds under which a party can make an application are:

• The lease has inadequate provisions relating to the repair/maintenance of the flat or building
• The insurance provisions of the lease are inadequate
• The lease has inadequate provision for the repair/maintenance of any installation required to ensure the occupier of a flat enjoys a reasonable standard of accommodation
• The lease has inadequate provision for providing any service required to ensure the occupier of a flat enjoys reasonable standard of accommodation
• The lease has inadequate or no provision for the recovery of money from a party to the lease which is spent on maintaining the building by another party to the lease
• The computation of a service charge detailed in the lease is inadequate. An example would be where a service charge proportion expressed as a percentage in all of the leases in respect of a building does not add up to 100%. 

6.2.3 There are also provisions under Section 37 of the Landlord and Tenant Act 1987 which provides a statutory route to the variation of several leases. 

6.2.4 A requisite majority of leaseholders who will be subject to the variation need to agree to the proposed variation. The test for the requisite majority varies depending upon the number of leases involved, for example:

• Where there are eight or fewer leases in respect of which the application is made, all or all but one of “the parties concerned” must consent to it; or
• Where there are more than eight leases in respect of which the application is made, at least 75% of “the parties concerned” must consent, and it is not opposed by more than 10% of the total number of “parties concerned” 

6.3 Repairs 

6.3.1 YHG shall put in place appropriate arrangements to maintain buildings and/or parts thereof in accordance with the lease obligations. This shall, where appropriate, include day-to-day repairs, cyclical maintenance, and major works.  

6.3.2 Leaseholders may report repair requests through a variety of customer contact channels e.g. Your Response, Webchat, Your Homes Hub, Email etc  (or out of hours arrangements in the case of an emergency).  

6.3.3 Leaseholders will be expected to maintain and repair their property in accordance with the terms of their lease and allow YHG to undertake periodic inspections, including (where applicable) inspections and the associated remedial work. 
 
6.3.4 Periodic maintenance and major works shall be programmed to maintain the condition of properties and, where required and appropriate, leaseholders will be consulted.  

6.4 Initial Repair Period

• Where a property has been purchased under the new model shared ownership lease (Affordable Housing Programme 2021 – 2026) a shared owner may be entitled to £500 a year for the first 10 years to help with essential repairs for maintaining fixtures and fittings that:
• Supply water, gas or electricity - for example sinks, baths or pipes
• heat the home, for example a boiler or radiator 

It does not include:

• installing other fixtures (such as kitchen cabinets) and fittings (such as a bed or sofa)
• installing appliances that use gas, electricity or water supplies, such as ovens or washing machines
• Damage caused by the shared owner
• repairs covered by the building warranty or any other guarantee. Any work covered by a warranty or guarantee must be claimed through the policy by the policyholder
• If the full repair allowance is not claimed in one year, a maximum of one year's allowance will roll over to the following year. The following example shows how the repairs allowance works if a claim in years 2 and 3.

During this 10 year period YHG will be responsible for essential repairs to: 

• The external fabric of the building
• Structural repairs to walls, floors, ceilings and stairs inside the home
• The shared owner must inform YHG that repairs are needed and YHG have the right to inspect the home to decide whether a claim will be accepted. YHG will inform the shared owner of the decision in writing
• If YHG were to reject a claim for repairs that have been caused by breach of the lease, we will:

1. Tell you why within 7 days of receiving your claim
2. Advise you of your right to dispute the decision
3. Set out the complaints handling process. 

6.5 Service Charges 

6.5.1 Information regarding the costs of the services for which service charges are charged will be provided in accordance with the lease and any statutory requirements. YHG will prepare timely and accurate information about the cost of services for which service charges are due from leaseholders, whenever possible and where applicable. 

6.6 Ground Rent 

6.6.1 Ground rent may be payable and if it is, it is payable in accordance with the terms of the lease.  

6.7 Management and Administration Fees 

6.7.1 Subject to the terms of the lease, YHG reserves the right to recover the costs for managing its leasehold properties. Management Fees which may vary from time to time, will cover the costs of providing management services in accordance with the  terms of the lease. 

6.7.2 The provision of any information or services that falls outside of the scope of the basic management fee may be subject to an additional Administration charge. A copy of our current Administration charges can be found on our website. 

6.8 Rent/Service Charge Collection 

6.8.1 Leaseholders will be offered a variety of payment mechanisms for the payment of their rent and/or service charges in accordance with YHG’s Income Policy. 

6.9 Rent/Service Charge Arrears 

6.9.1 Leaseholders will be provided with information, about their rent and/or service charge accounts at regular intervals. Any leaseholder falling behind with payments will be advised accordingly, and appropriate action for arrears recovery will be taken. 

6.9.2 If arrears occur, the leaseholder will be contacted and encouraged to either make an immediate payment to the clear the full amount, or to make an arrangement with YHG to clear the outstanding debt by defined instalments, by way of a written repayment agreement.  

6.9.3 Leaseholders may be offered advice about housing and other benefits which may assist them in maximising their income and/or meeting their lease liabilities.  

6.9.4 If the leaseholder is unable to meet the terms of a repayment agreement, consideration may be given, along with any mortgage lender of the leaseholder, to reschedule the debt or undertake other appropriate courses of action.  

6.9.5 Where other courses of recovery action have failed, consideration may be given to commence legal proceedings. Legal action may include money judgement orders, or following persistent failure to pay service charges, action for forfeiture/possession (bringing the lease to an end), in accordance with leasehold legislation.  

6.10 Flexible Tenure 

6.10.1 Shared Ownership Leaseholders who face repossession by their mortgage lender will be offered the opportunity to be considered for Flexible Tenure when all other debt management solutions have been investigated. 

6.10.2 We will explore every possible support option where a shared owner is experiencing severe financial difficulties to remain in their own home, despite changes in their financial circumstances. It is aimed at preventing repossessions and the loss of the home. The intent is to provide for the shared owner to restructure their debts, 
including rent arrears or to enhance their overall financial position. 

6.10.3 There is no ‘right’ to downward staircasing and any offer is at YHG’s discretion. The decision will be provided to the shared ownership leaseholder in writing, detailing the reasons for the decision. 

6.11 Buildings Insurance 

6.11.1 YHG (where the lease permits) will insure the premises to their full reinstatement value and provide to leaseholders’ details of the sums insured, perils covered and premiums on request.  

6.11.2 Leaseholders must inform YHG of any changes in circumstances that may impact on the insurance, for example, subletting, where a lease permits subletting.  

6.11.3 It will be the responsibility of the leaseholder to complete and submit claim forms to the insurer where damage is the leaseholder’s responsibility to repair. The contact details for the insurance broker will be provided on request. 

6.11.4 In the case of damage to a block or structure, where liability is that of YHG under the lease, YHG will complete and submit claims to the insurer. Where the leaseholder is in possession of supporting facts or information, they will be expected to provide this 
in support of the claim.  

6.12 Cost of Major Works (including Structural Works) & Reserve/Sinking Funds 

6.12.1 YHG will aim to ensure that the costs of any major works which may be required represent value for money and are charged in line with the terms of the lease and any relevant legislation.  

6.12.2 YHG will establish sinking funds to provide for future major works and/or repairs where the lease allows or where contributions have been collected as an agreed and accepted practice over previous years.  

6.12.3 YHG will where possible (but is not obliged to), explore with the leaseholder alternative repayment mechanisms for meeting the costs of major works for which they are liable.  

6.12.4 YHG will discuss with leaseholders’ arrangements to assist them in planning for any foreseeable longer-term financial liabilities.  
6.13 Consultation  

6.13.1 YHG is accountable to its tenants and leaseholders and is committed to promoting their involvement with the services that it provides and where appropriate YHG will consult leaseholders on the services it provides both individually and using service user forums as appropriate and in accordance with legislation and legal advice where sought. In particular:

• Works which fall within the consultation requirements of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003.

These are as follows:

• Carry out qualifying work which will cost any one leaseholder more than £250. This includes repairs, maintenance and improvements (if the lease allows) to the building and estate
• Enter into a long-term agreement (for more than 12 months) with outside contractors for work, supplies or services which will cost any one leaseholder more than £100 a year. Examples include cleaning, grounds maintenance and surveying
• Carry out work under a long-term agreement where the work will cost any one leaseholder more than £250. 

6.13.2 YHG will work to establish leaseholder groups and will promote their formation at a local level on schemes and via Your News. The Customer Engagement Team will support the establishment of leaseholder forums. It will provide such groups with appropriate advice and assistance as necessary. 

6.14 Leaseholder Improvements  

6.14.1 The lease will dictate if alterations by a leaseholder are permitted and if consent is required. If consent is required then any leaseholder wishing to carry out improvement works is required to submit full details of the proposed work, including proof of planning permission and building control consent where applicable. Any 
home improvement must be carried out in accordance with the terms of the lease.  

6.14.2 Additionally express permission must be requested and granted for any alteration requests for works that share a dividing wall with the communal areas including flat front doors. 

6.14.3 The decision to grant or refuse permission will be provided to the leaseholder in writing detailing the reasons for the decision.  

6.15 Breaches of the Lease 

6.15.1 Appropriate action will be taken whenever YHG becomes aware that a leaseholder is acting in breach of the terms of their lease. Such breaches may include, but are not limited to: 

• Unapproved works
• Unauthorised subletting
• Improper use
• Failure to maintain, or damage caused to, premises
• Refusal of access to YHG’s officers
• Harassment or other neighbour nuisance
• Unpaid ground rent, specified rent or service charges (or other charges payable under the lease)
• Personal items or rubbish being kept in the communal areas/stairwells etc
• Keeping pets where the lease specifically prohibits them. 

6.15.2 In all such cases, unless the terms of the lease require an alternative form of action or remedy, YHG will first serve notice in writing on the leaseholder requiring them to remedy the breach. If the breach continues, further action will be taken, which may include seeking an injunction, or as a last resort, taking action against the leaseholder for the forfeiture/possession of their lease. If applicable a Section 146 (Law of Property Act 1925) Notice will be served once an admission or determination of the breach has been obtained.  

6.16  Sale of Leasehold Property 

6.16.1 YHG will respect leaseholders’ entitlement to sell their property, which will be the leasehold interest, to third parties and will deal with enquiries relating to such sales in accordance with the terms of the lease in a prompt and efficient manner.  

6.16.2 Leaseholders should notify YHG of transfers, sales, subletting, or other dispositions and provide YHG with up-to-date correspondence addresses.  

6.16.3 YHG reserves the right to charge a fee for services and documentation provided.  

6.17  Leaseholder Enfranchisement and Lease Extension 
 
6.17.1 Should leaseholders request to acquire the freehold of the block of flats (collective enfranchisement). YHG will comply as required with current legislation.  

6.17.2 YHG will make available, information relating to the right to collective enfranchisement to any leaseholder requesting it.  

6.17.3 Lease extension for flats is provided for in the Leasehold Reform, Housing and Urban Development Act 1993 and in the Leasehold Reform Act 1987 for houses, although the processes may change once the Leasehold & Freehold Reform Act 2024 is fully implemented.  

6.17.4 Presently a ‘lease extension’ the process involves the issue of a new lease for 90 years, for flats and 50 years for houses, plus the balance of the old lease. However, this is expected to increase to 990 years for both flats and houses when the changes are in force. This provides an ideal opportunity to determine and update the lease terms. In all circumstances the owner must seek their own legal advice. 

6.18 Staircasing 

6.18.1 YHG will support leaseholders with the staircasing process relevant to their property, determined by the terms of the shared ownership lease. Leaseholders will be provided with a staircasing guide detailing the process upon request. 

6.18.2 YHG will instruct an independent valuation on the property to ascertain the price of the share they wish to purchase. The leaseholder is responsible for the cost of the valuation. The following are key principles and requirements of the valuation report:

• The valuer must be registered with the recognised qualification of RICS (Royal Institute of Chartered Surveyors)
• The valuer must be independent
• The valuer should provide comparable properties and sale prices where possible
• The valuer must inspect the interior of the property and provide a full valuation report
• The valuer must be informed of any improvements undertaken to the property by the leaseholder (these improvements must have received prior written approval from YHG). Any such improvements will be disregarded in the valuation
• Where there is disrepair in the property, this will also be disregarded in the valuation
• Valuations carried out for bank or mortgage purposes are not acceptable
• YHG will require a copy of the valuation report; the validity of the valuation must be shown on the report. 

6.18.3 The valuation report is valid for the period of 3 months from the date of the report. If the staircasing transaction does not complete within the 3-month period, the leaseholder may be required to obtain a revised valuation report. The leaseholder 
would be responsible to bear the cost of this. YHG can arrange a valuation report on behalf of the leaseholder by an independent valuer, however, the leaseholder will be required to pay YHG for the cost of this service in advance. 

6.18.4 Once the valuation report has been received YHG will inform the leaseholder in writing of the sale price for the remaining equity/share to be purchased. This will include any considerations for any improvements or alterations which the leaseholder has undertaken, that have been disregarded in the valuation, as well as 
any disrepair to a property.   

6.18.5 The leaseholder is required to provide written approval that they wish to proceed with the staircasing process and acquire remaining shares/equity, this must include details of the solicitor who will act for them in this transaction. The leaseholder will be responsible to pay for their own legal costs.   

6.18.6 YHG on completion of the staircasing transaction will amend all internal records to reflect the current ownership position. 

6.19  Buying Further Shares – New Model Shared Ownership Leases - Affordable Housing Programme 2021 – 2026

• Where a property was bought on the new model shared ownership lease then the shared owner can by additional shares of 5% or more at any time – the same process will be followed as above
• There is also the option to buy a 1% share each year for the first 15 years
• The 1% share is based on the original market value adjusted up or down each year in line with the House Price Index (HPI)
• We will provide an up-to-date HPI valuation at least once a year and again when a request in made to buy a 1% share
• Shares of 2%, 3% and 4% cannot be bought. 

6.20  Buy Back 

6.20.1 YHG may buy back leases from leaseholders in exceptional circumstances.  

6.20.2 Each case will be assessed on its merits and Buy Back will depend on funds available for this purpose.   

6.21 The Right to Manage 

6.21.1 The Commonhold and Leasehold Reform Act 2002 gave leaseholders the right to manage the block of flats they live in. Changes have been introduced by the Leasehold & Freehold Reform Act 2024, whereby the non-residential areas in the building such as shops, should not make up more than 50% of the buildings entire floor area, this has increased from 25%. 

6.21.2 We will work with any leaseholder groups and provide the necessary information as prescribed by law to assist them in the formation of a Right to Manage company. 

6.22 Complaints 

6.22.1 YHG will first seek to resolve any complaints at service level. If this cannot be done to the leaseholder’s satisfaction complaints may be escalated through the YHG’s formal complaints process. This does not take away either party’s right to take any 
further legal action. 

6.22.2 YHG are a member of the Housing Ombudsman Scheme. Customer can contact them at any time during their complaint via their website at www.housingombudsman.org.uk or email [email protected] or telephone 0300 111 3000.

All YHG staff responsible for the management of leasehold properties are required to adhere to this policy. Specifically, staff in the following teams:

• Housing Management  
• Commercial Housing
• Older People Services
• Asset Management
• Finance  
• Charge Setting 

The Head of Housing is responsible for overseeing the implementation of this policy.  

Should the risks associated with the terms of this policy not be adhered to, it could result in an adverse financial and reputational impact to YHG and compromise the safety of anyone living in, working at or visiting the building. These risks are managed with external legal support and through external and internal audits to provide assurance that processes and procedures associated with the management of leasehold properties are being managed effectively.  

YHG understands that confidentiality is important to customers and will treat all information relevant to each customer in the strictest confidence.  

We approach the protection of personal data in a comprehensive manner in line with the Data Protection Principles of the UK General Data Protection Regulations (UK GDPR) and the Data Protection Act 2018 (DPA) (collectively referred to as the Data Protection 
Legislation).   

YHG’s Data Protection Policy will also be adhered to in following this policy during our allocations and lettings activities. We will collect, store and process personal information of our existing and potential new customers, (applicant/s) and recognise that the correct and lawful treatment of this data is necessary to provide for the continuance of successful business operations and maintain confidence in YHG.  
Customer data will be retained in our secure internal system documotive in line with the principles of GDPR and YHG’s Document Retention Policy.  

This policy has undergone an Equality Impact Assessment and is compliant with the requirements of the Equality Act 2010.  

This means that we will not discriminate against customers on the grounds of their age, disability, gender reassignment, marriage or civil partnership status, pregnancy or maternity status, race, religion or belief, sex, or sexual orientation. 

The Policy is available in alternative formats on request. 

This policy will be available to all YHG employees on our internal intranet and will be communicated to all teams involved in providing services to our leasehold customers. 

This will further be supported by a policy briefing across the organisation.  

The policy will also be made available on all our external website for easy access for customers and our partners.  

As changes occur to legislation which impacts the management of leasehold properties training will be delivered to all relevant staff and the policy will be updated. 

Periodically external training via YHG’s solicitors will be provided to YHG staff to provide an update on good practice and case law.  

Performance regarding this policy is reported alongside Commercial Housing management information. The number of properties in management, property sales and staircasing transactions is also reported via the Regulator of Social Housing Statistical Returns. 

This policy will be reviewed every two years or sooner if required by changes to legislation or other YHG policies. 

The Head of Housing is responsible for reviewing and updating this policy.