Council Tenant Purchase Scheme

T1204

Hi. I am just wondering if anyone has applied to buy their council house through the tenant purchase scheme and what have their experiences been? I have applied to Fingal County Council. A valuer has called to the house but I have yet to hear what the value of the house is.

foxy06

It is a very long process. I applied about 18 months ago and contracts were only sent to my solicitor last week. We also had a lot of trouble securing finance because of the conditions of sale. Best of luck to you but be aware it's not an easy process.

T1204

18 months?!?! I didn't realise it would take so long!!! I wonder why it takes such a long time. Nothing's ever straight forward is it?! The house was valued the other day. What's the next step? I'm conscious of house price increases!!

foxy06

To be fair I was in the first batch to avail of the scheme when it opened and so there were delays that may not happen to someone starting now. Next step is they send you a letter offering the house for sale then you respond accepting or appealing value. Once you accept you have to prove you have finance in place and then council send someone out to map the house. This is just to confirm the land you are buying. They will then send the contracts to your solicitor and that's where I am but hopefully there isn't much left after that!

T1204

Thanks!!! Hopefully it won't be a long and painful process. Hope you get things finalised at your end very soon

Curiouslady01

Hi guys, can you please help me. If someone purchases a council house at the discounted price they have to abide by the strict rules imposed by the council about selling etc, but when that person dies and the house is passed on to their child can the child do as they want with the house or do they in turn have to abide by the rule of not being able to rent or sell the property?
Grim question I know but hopefully someone can help me out.
Many thanks

T1204

Hi, I'm not sure what would happen in this situation but this is information that I would like also! I have applied to purchase a council house under the new scheme (Rebuilding Ireland) but am awaiting their reply. Have you applied yet curiouslady01?

I've been through this process in Louth, with a property in my father's name (as he is the tenant) but with my money (as I intend to live there).

In the process of buying the house you agree that, depending on the discount you get (40, 50 or 60%) you have to pay back a percentage of the discount to the council if you sell the house within a certain time frame (20, 25 or 30 years). It doesn't matter if the parent dies or not. It's all to do with the house purchase date and nothing else.

To give an example, your dad bought the house on january 1st 2010. Got a 50% discount on market value and has to pay back the Council the difference in discount if sold within 25 years. Unfortunately, your dad dies (*important note about this below!) and you bury him on January 1st 2020. Despite him no longer being around, if you sell that house before January 1st 2035 you still owe the Council money.


Also, keep in mind, that when you try to sell, no matter whether its within the 25 years or not, the Council must be given first choice on whether or not they would like to buy the property.



*important note about your parent dying - and this is based on absolutely nothing factual and entirely anecdotal evidence - I've been lead to believe that it is entirely possible, especially in cases where the Council are also the ones supplying the money to buy the house (council mortgage) that they can/will take the house back into social housing stock once the owner dies (council are entitled to sell the house to recoup their money, but are also offered first refusal, so they just sell it to themselves, as they will have a legal charge on the property). To the best of my knowledge, you have to get the house either put in a will to you (often free with some solicitors, but not bullet proof if you have siblings that may want to flog the house for their share of it) or, a better but more expensive idea, you will have to add your name to the title of the house. This can cost a few euro I believe but as the parent is alive to do it, it means you're less likely to run into sibling issues etc as the house will transfer directly to you once the parent passes away.


I want to stress that my info above there is not intended as scare mongering, but it could well be scare mongering, as I haven't actually yet verified it and it is based entirely on anecdotal evidence. I don't think it applies if someone other than the Council supplies the money though (as generally with mortgage or secured loans you're required to have insurance in place that would wipe out the loan in the event of a death).

kellsum

Sorry for dragging this up again but I'm wondering has anyone found a bank or building society to take on the conditions associated with purchasing a council house with the tenant purchase scheme? If so could you PM me the name of the bank/BS?

Loho83

kellsum wrote: »

Sorry for dragging this up again but I'm wondering has anyone found a bank or building society to take on the conditions associated with purchasing a council house with the tenant purchase scheme? If so could you PM me the name of the bank/BS?

Hi Kellsum
Just wondering if you had any response with this? I'm finding it very hard to get anywhere with lenders and although the rebuilding Ireland loan seeks good I'm afraid it'll take so long that the house price will increase again

Thanks

kellsum

Hi Loho83, no I had to go with the loan from the council themselves as I just couldn't find anyone to take on the charge that was stipulated, you are right it does take ages I submitted mine in March and it is only getting sent to Dublin for June and it has to get approval from Government firstly then back for council approval. I was told that if the house price might go up but i think its if I get refused from the scheme the next application I will need to have a new house appraisal (at least Im hoping thats it!!)
You should definitely continue with the Ireland rebuild scheme if you can, worry about the house going up after you have submitted your forms. Its a long process but hopefully it will be worth it

Good luck and let me know if i can help you.

foxy06

Folks I don't want to put you off but I'm at this 2 years now and still haven't closed. I got approved finance with Core credit union as they are doing home loans. I have to give them all my documents again for the 3rd time as their 6 month approval letters have run out twice!
Other than them the only other place that will finance it is the council themselves. I have had house valued 18 months ago and signed contracts before Christmas and still waiting. It's the most frustrating thing I have ever done. I know I will think differently when it is finally over but the councils are difficult to deal with. Just be ready for a long process.

Regarding the question about the conditions still applying after death of the owner yes they do pass down to whoever inherits the property. The still owe the claw back to the council and there are limits on who they can sell it to.

The_Conductor

A number of owners of properties with these local authority stipulations- who were not the original purchasers of the properties- brought cases to try and have the various clauses in the title deeds quashed in the years between 2002 and 2008. I'm not aware that there was a single case where the conditions were overturned. A single case, involving a government department rather than a local authority- where the residential dwelling is wholly surrounded by public owned property- actually had additional clauses added to the title after the fact- when the original purchaser of the property actively attempted to breach the pre-existing conditions.

The idea of the scheme is to assist the current occupier to house themselves and take responsibility for their own housing requirements- it is not to hand over an asset to a tenant with a big ribbon on it- and give them a payday.

If people are genuinely interested in the scheme- they would be well advised to get their applications in as soon as possible, as the operation of the scheme is in the upcoming review (and it was based on the now defunct Scottish scheme- which was shown to have failed miserably- for the same reason that is being held up in Ireland's case- disposing of property under this and the previous scheme- was not met with a commensurate purchase of additional housing units with the funds generated by the sales.

The whole sector- is in for a serious overhaul- now that the housing associations are being taken back on public books- and this scheme is on the to-do list.

JupiterKid

Given the current housing affordability and availability crisis and the lack of new build social housing and the huge and growing housing waiting lists, it is very likely that in the major urban areas the tenant purchase scheme will be abolished after 2020 as it has been shown by research to have seriously eroded housing stock that local authorities have available to rent to those in housing need and in low incomes.

So, I would advise anyone thinking of availing of tenant purchase to act pretty fast. Also, the clawback in resale is wholly justified in my opinion. In previous years many social housing tenants were given windfall discounts that enabled them to sell at a huge profit during the Celtic Tiger boom years. This was very unfair to others in other housing tenures.

Loho83

kellsum wrote: »

Hi Loho83, no I had to go with the loan from the council themselves as I just couldn't find anyone to take on the charge that was stipulated, you are right it does take ages I submitted mine in March and it is only getting sent to Dublin for June and it has to get approval from Government firstly then back for council approval. I was told that if the house price might go up but i think its if I get refused from the scheme the next application I will need to have a new house appraisal (at least Im hoping thats it!!)
You should definitely continue with the Ireland rebuild scheme if you can, worry about the house going up after you have submitted your forms. Its a long process but hopefully it will be worth it

Good luck and let me know if i can help you.

Hi Kellsum

I finally got good news last week after an agonising wait but finally got my full approval with EBS after pretty much being on their case and council the whole time. Everything due to be signed off now this week. I was very panicked about running out of time and then contracts had moved along from councils solicitor and the underwriter in EBS still wouldn't sign off on the mortgage. The sheer stress of it all should have been unnecessary and now I'd say anyone applying to ebs (in carlow anyway) will have an easier time as I seemed to be the first person they had apply from kildare county council under new scheme with that damned incremental charge 😵 Lenders are new to this and in my experience they don't want the hassle of looking into it for people. I'm very happy EBS didn't back down trying to find a way to do it

kellsum

That is great news Logo83, you are lucky as EBS Galway refused me! but I also have good news as I got confirmation that I was approved from the Rebuilding Ireland scheme so just awaiting papers myself, hopefully others will have an easier time now, i for one cannot wait until the whole process is over and I can relax a small bit!

Loho83

kellsum wrote: »

That is great news Logo83, you are lucky as EBS Galway refused me! but I also have good news as I got confirmation that I was approved from the Rebuilding Ireland scheme so just awaiting papers myself, hopefully others will have an easier time now, i for one cannot wait until the whole process is over and I can relax a small bit!

Oh that's brilliant news!! Congrats... I know exactly what you mean. I'm starting to tune back into the world around me again after the torment. Best of luck with the house now!

Rebelmac1

Hi Guys,

Anyone have an update on how they progressed with their application. Reading other comments it seems our process has been much quicker than previous members.

We submitted expression of interest about 3 months ago. In that time we have had an auctioneer who done a valuation, accepted the price from the council, an engineer out to do the pre puchase survey and the offer signed and sent back via our solicitor.

Council sent someone out today to establish the BER rating , supposedly something that happens just before close of sale.

Everything I thought was running quite smoothly apart from the finance side of things, we are approved in principle by the bank but for them to progress it further, the bank requires the council to sign a priorities agreement which effectively means the bank ranks 1st in terms of charge on the lease.
Going off previous posts I predict this could spell difficult. Has anyone else experienced this and if so , did the council sign or drag their heels?

kellsum

Hi Rebelmac1,

It does seem to have moved quick enough for you, it took me 18 long and stressful months from start to finish but thankfully its all over now! Yes the council will not remove the charge I'm afraid so that is the issue, I did try everything and about 5 banks and had many meetings I was always approved in principle but in reality they wouldn't give a mortgage to someone that they couldn't put a charge on the house. I did hear from someone on this that IBS carlow were doing it but I'm unsure.
There is always the option of getting your 3 refusals and going with the mortgage from the council themselves and that takes ages and ages for them to do and it might be good to get that going as soon as you can so that will hopefully make it a quicker process than mine
Best of luck with it