Most people who work in housing associations already know what staircasing is, so this is aimed at those new to the sector, or those already working in the sector who might not undertake staircasing day-to-day.
In short, the shared ownership lease gives the leaseholder the right to staircase – buying larger shares in their lease – in increments of at least 10%.
The process for staircasing a flat lease is detailed below;
- Firstly, the property will be valued by an independent valuer.
- The leaseholder will then have a chance to consider the valuation, and whether they want to dispute this, however, in most cases they don’t.
- Once agreed both the leaseholder and the housing association appoint solicitors to act for them.
- The housing association’s solicitor will then issue the memorandum of staircasing to the leaseholders’ solicitors. This is in a prescribed form already located at the back of the lease and will contain confirmation on the share being purchased, and what rent (if any) is payable after the staircasing.
- The leaseholder’s solicitors will then send the staircasing premium to the housing association’s solicitor
- The housing association’s solicitor will then send the housing association’s signed memorandum to the leaseholder’s solicitor.
- This is then registered at HM Land Registry, making it a publically available document, evidencing that the larger share has been purchased.
The process of staircasing a house lease is slightly different. It largely follows the same process as above however, usually all or part of the freehold is transferred on final staircasing of a house lease.
It is incredibly easy to come unstuck in determining what legal title can and cannot be staircased, as legal titles can sometimes change over time, and in some cases the original shared ownership lease is drafted incorrectly resulting in pragmatic thinking from your solicitor, who needs to be well versed in this niche area.
If you have any further queries about staircasing then please contact Sundas Malik or Rosemond Sarpong in our Development Sales Team.