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Publication - Guidance

After-sale shared equity procedures: guidance

Published: 13 Oct 2017
Part of:
Housing
ISBN:
9781788513401

Guidance to cover after-sale procedures in relation to Scottish Government’s various shared equity schemes.

105 page PDF

681.5kB

105 page PDF

681.5kB

Contents
After-sale shared equity procedures: guidance
Annex 5 - Application for temporary letting

105 page PDF

681.5kB

Annex 5 - Application for temporary letting

Annex 5(A) - Letter/Email to owner who is proposing to let (See Guidance -€“ Section 11, Corresponding with Owners)

Dear

Title & Full Name ("the Owner")

Full Address ("the Property")

Proposal to let for a temporary period

Thank you for your enquiry about letting your property for a temporary period.

In order to proceed, we would be grateful if you could please complete the form overleaf and return to us. Please provide as much detail as possible to allow us to fully consider your request.

Please note that in order for us to deal with your request, we will require to receive payment in advance for our administrative costs; which in this case will be Agent's fee inclusive of VAT at 20%. Payment can be effected by telephone with debit or credit card or by providing us with a cheque for this amount made payable to Agent's details . ( please write your name and address on the reverse of the cheque). Please note there is no guarantee that your request will be approved and that our administration fee is non-refundable.

Once we have received your form and payment, we will give consideration to your circumstances and respond to you within 5 working days with an outcome. The standard length of let will be for 6 months with a possible extension for an additional period of 6 months. Consent to this extension period will only be given provided that you are able to confirm to us before the end of the initial 6 month period one of the following:

  • that you are intending to move back into the property at the end of the 12 month period and will provide evidence to confirm that fact; or
  • that the property will be marketed for sale and that the current tenancy will not be extended beyond the 12 month period; or
  • that you will increase your equity stake in the property to discharge the Scottish Government's security before the end of the 12 month period; or
  • that before the end of the 12 month period, you will submit a request to further let the property beyond the 12 month period. Please note that in the event this request to let the property beyond the 12 month period is denied, you will be expected to pursue one of the other options noted above.

Any approval is subject to your Solicitor or Letting Agent confirming to us that

  • The letting is on a properly constituted short assured tenancy or (once it has come into force and has replaced short assured tenancies) a properly constituted private residential tenancy
  • The letting has been approved by your mortgage provider and
  • You are registered as a landlord with the Local Authority or are exempt from registration.

Please be advised that you are required to provide Agent with the current address you temporarily reside in, and a contact number. We must be notified of any changes to this during the period of the let. We must be able to contact you at any time, in respect of the temporary let of your shared equity property.

Please contact me if there is any further information you require.

Yours sincerely

Annex 5(B) - Application to let property for a temporary period

Please complete and return to Agent's details .

Please complete your Solicitor's/Letting Agent's name, address, contact number and email in the opposite section:

Name:

Address:

Tel:

Email:

Please state the reason for wishing to let the property for a temporary period. (We may ask for additional evidence to support your request)

Temporary move for work/study (Please provide a contract of employment or course details)

Moving to a new area (please provide details below)

Travelling for a temporary period (please provide details below)

Unable to sell property due to negative equity (Please provide a property valuation report and evidence of current mortgage balance)

Other (or further information) - please specify

When will/did the let start?

For how long do you envisage the property will be let?

Please provide us with payment of Agent's Fee (incl. of VAT). You may do this be either contacting us at the number shown on the letter or by providing us with a cheque payable to Agent's details .

Full name

Full Address

Email:

Tel:

I/We hereby give consent for Agent to discuss my/our personal information with the above agents. I/We will inform Agent of any changes in respect of my/our address and contact numbers. My/Our current address I/we temporarily reside in is:

Address:

Full Name:
Full Name:
Date:

Annex 5(C) -€“ Guidance to Agents on Assessing Applications to Temporarily Let their Shared Equity Property

All information below is for guidance only and each case should be assessed on an individual basis taking into account the applicant's unique circumstances.

Reason for letting

Suggested response

Working or studying away from home for a temporary period of time.

Proof of employment or acceptance to course will be required. Consent should only be provided for a maximum 12 months period. Requests to further let should be considered at the end of the period, provided that this is still intended to be a temporary arrangement.

Owner is moving to a new area but is unsure if this will be a permanent move.

Consent should be given for a maximum of 12 months on the condition that the owner is not intending to purchase a second property. No extension should be considered to this period under these grounds.

Owner needs to move but is unable to sell the property due to negative equity.

The owner will be required to provide evidence of the current market value of the property and a mortgage redemption statement to confirm this position. The owner must also confirm that they will not be purchasing a second property during this time. Upon confirmation, consent should be granted for a period of no more than 12 months. In general, no further let should be considered beyond this period if there is enough equity to repay the primary lender's loan and the owner should be advised that the Scottish Ministers would be willing to accept a shortfall upon sale.

Moving in with a partner

As the property is intended to be the owner's sole and primary residence, no consent should be provided. Flexibility should be provided for cases where the property is in negative equity. In this case, please refer to the guidance above.

Buying a second property and wishing to let out the existing property.

No consent should be provided. Further, the owner should be advised that they are unable to purchase a second property while the Scottish Ministers retain a security on the property. Information should be provided on selling or increasing their equity in the property. If the owner has already purchased a second property, details should be passed to Scottish Government, to determine in conjunction with Harper Macleod whether this triggers a Payment Event.

Subletting a room or taking in a paying lodger.

No consent should be provided for this while the Scottish Ministers retain a security on the property.

Request to let the property on anything other than a SAT (or PRT) basis. E.g. holiday hire through services such as AirBNB

No consent should be provided for this while the Scottish Ministers retain a security on the property.

Further request to let beyond the initial period.

In general, if circumstances remain unchanged, no further let should be granted, except in exceptional circumstances or in the specific ones mentioned above.

Annex 5(D) -€“ Application to permit temporary letting -€“ Record of decision.

Insert name of owner(s) (the "Owner")

Insert address of property (the "Property")

After reviewing the above application, we would confirm that the request to let the property has been rejected OR accepted.

[If rejected please give reasons].

[If accepted please give reason and insert the following:]

This approval is subject to confirmation in writing being received from the Owner's solicitor that (a) the proposed letting is on a short assured tenancy or private residential tenancy basis (as appropriate); (b) the proposed letting has been approved by the primary lender; and (c) the Owner is either registered with the local authority or is exempt from registration.

Consent is given for the letting of the Property for a maximum period of 6 months plus a 6 months extension period and that the owner must take all necessary steps to recover possession of the Property at the end of the permitted period and to resume occupation of the Property themselves, including if necessary obtaining an order from the First Tier Tribunal for the eviction of the tenant based upon the eviction ground that either the owner intends to live in the Property or to sell it.

Annex 5(E) -€“ Email from RSL to Owner's Solicitor/Letting Agent re Proposal to let Property for a temporary period.

Insert name of owner(s) ("your clients")

Insert name of property (the "Property")

Proposal to let for a temporary period

I confirm that Scottish Government has not approved your clients' request to let the property for a temporary period for the following reason(s):

  • [insert details]

OR

I confirm that your client's request to let the Property for a temporary period of time has been approved subject to satisfactory confirmation from you that (a) the proposed letting is on a short assured tenancy or private residential tenancy basis (as appropriate); (b) the proposed letting has been approved by the primary lender and (c) your clients are either registered with the local authority or are exempt from registration.

I enclose draft letter to this effect and would be grateful if you would complete the same on company headed paper when you are in a position to do so.

Please note that until we receive this letter from you, your clients are not permitted to let the Property.

Consent is given on the following conditions -€“

1. The maximum period of the letting is 6 months (the "Permitted Period") with a possible further 6 months extension period (see below).

2. If the letting proceeds by way of a short assured tenancy, the contractual period of the tenancy is six months.

3. If the letting proceeds by way of a private residential tenancy, your clients must take all necessary steps, at their cost, to obtain an order from the First Tier Tribunal for the eviction of the tenant at the end of the permitted period based upon the eviction ground that your clients as the owners either intend to live in the Property or to sell it.

If the owner wishes to continue to let the Property beyond the Permitted Period they must contact us before the expiry of the initial 6 month period to request consent to extend the let, Consent to this extension period will only be given provided that your clients are able to confirm to us before the end of the initial 6 month period one of the following:

  • that they are intending to move back into the property at the end of the 12 month period and provide evidence to confirm that fact; or
  • that the Property will be marketed for sale and that the current tenancy will not be extended beyond the 12 month period; or
  • that they will increase their equity stake in the property to discharge the Scottish Government's security before the end of the 12 month period; or
  • that before the end of the 12 month period, they will submit a request to further let the Property beyond the 12 month period. Please note that requests to let the Property beyond the 12 month period are only approved in exceptional circumstances, and in the event that any such request is denied, your clients will be expected to pursue one of the other options noted above.

Annex 5(F) -€“ Template Letter to be provided by Owners' Solicitors or Letting Agents

PLEASE PROVIDE DULY COMPLETED AND SIGNED ON COMPANY HEADED PAPER, AND RETURN TO THE ABOVE ADDRESS

To ( insert name of address of RSL ) OR (the Scottish Ministers c/o insert name and address of the RSL) dependent on whether Agreement pre- or post- 6 April 2008.

Dear Sirs

Insert name of owners ("our clients")

Insert address of property (the "Property")

Insert name of Primary Lender (the "Primary Lender")

Proposal to let for a temporary period

We refer to your letter of ( insert date ) in connection with our clients' proposed letting of the Property for a temporary period and confirm:-

(a) the letting is on [a short assured tenancy basis in terms of the Housing (Scotland) Act 1988 (the "Act") for an initial period of six months and all notices that require to be served in order to establish the same have been duly served on the tenant in terms of the Act]/[a private residential tenancy basis in terms of the Private Housing (Tenancies)(Scotland) Act 2016]; [ Select relevant option according to whether the Property is being let before or after short assured tenancies are superseded by private residential tenancies under the Private Housing (Tenancies)(Scotland) Act 2016 ]

a) The letting is on a short assured tenancy basis in terms of the Housing (Scotland) Act 1988 (the "Act") for an initial period of six months and all notices that require to be served in order to establish the same have been duly served on the tenant in terms of the Act

OR (Company to please delete as appropriate)

a) The Letting is on a private residential tenancy basis in terms of the Private Housing (Tenancies)(Scotland) Act 2016

b) The letting had been approved by the Primary Lender in terms of their lending security documentation

c) Our clients are registered as a landlord with the local authority under the Anti-Social Behaviour (Scotland) Act 2004

OR (Company to please delete as appropriate)

c) Our clients do not require to be registered as a landlord with the local authority in respect of this letting for the following reason - [ insert details]

In this letter reference to any statute shall include reference to that statute as the same may be re-enacted, amended or replaced.

Yours faithfully

Full Name

On Behalf of (insert company name)

Annex 5(G)

Letter to Owner confirming permission to let and the effective date

Dear Mr/Ms/Mrs Surname OR Sirs(If writing to Mortgage Provider)

Title & Full Name ("the Owner")

Full Address ("the Property")

Let Effective Letter

I refer to your application to temporarily let the above property.

I am pleased to inform you that Scottish Ministers consent to the temporary let for an initial 6 months period with the possibility of an additional period of 6 months. Consent for a further 6 months will only be granted provided that you confirm to us before the expiry of the initial 6 month period one of the following:

  • that you are intending to move back into the Property at the end of the 12 month period and provide evidence to that fact; or
  • that the Property will be marketed for sale and that the current tenancy will not be extended beyond the 12 month period; or
  • that you will increase your equity stake in the Property to discharge the Scottish Government's security before the end of the 12 month period; or
  • that you will submit a request to further let the Property beyond the 12 month period. Please note that requests to let the Property beyond the 12 month period are only approved in exceptional circumstances, and that in the event such a request is denied, you will be expected to undertake one of the other options noted above.

Please be advised this period will commence from Date agreed for Let start . I would further advise that this consent is subject to the requirements stated in our initial correspondence.

You are required to contact us on or around INPUT THE DATE -€“ 6 months from the Let effective date , advising us of your circumstances and intentions as detailed above.

Please contact me if you have any queries.

Yours sincerely

Annex 5(H) -€“ Email to clients after initial 6 months let period

Dear Title Surname

Title First Name Surname ("the Owners")

Full Address ("the Property")

The initial 6 month period of your consent from the Scottish Ministers to let the Property has now expired. In order to continue to let the Property for the 6 month extension period, we require you to contact us to make clear your intentions for the end of the 12 month period.

Your options are set out below, including information regarding how to progress each alternative:

  • You are intending to move back into the Property at the end of the 12 month period and will provide evidence to that fact at the time by way of a Council Tax invoice; or
  • You are intending to market the Property for sale. If the Property is being let on a Short Assured Tenancy basis the current tenancy should not be extended beyond the 12 month period. We will provide you with an information letter explaining the process for selling your Property; or
  • You are intending to increase your equity stake in the Property to discharge the Scottish Government's security before the end of the 12 month period. We will provide you with an information letter explaining the process for increasing your equity; or
  • You will submit a request to further let the Property beyond the 12 month period. We will provide you with an information letter explaining this process. Please note that these requests for consent to further let the Property are not normally granted except in exceptional circumstances and in the event this request is denied, you will be expected to undertake one of the other options noted above.

I look forward to hearing from you as a matter of urgency. Please contact me if you have any queries.

Annex 5(I)

Letter to Owner to let the Property for a further period of time

Dear

Title & Full Name ("the Owner")

Full Address ("the Property")

Proposal to extend the let for a temporary period

Thank you for your enquiry about extending the let of your property for a temporary period.

In order to proceed, I would be grateful if you could please complete the form overleaf and return it to us. Please note that in order for us to deal with your request we will require to receive payment in advance for our administrative costs, which in this case will be £<> inclusive of VAT at 20%. Payment can be effected by telephone with a debit or credit card or by providing us with a cheque for this amount made payable to <> (please write your name and address on the reverse of the cheque).

Once we have received your form and payment, we will give consideration to your circumstances and respond to you within 5 working days with an outcome. Please note that an extension to your initial period will only be granted in exceptional circumstances. The maximum length of let will be for 6 months with a possible extension for a further 6 months. Consent to a possible extension for a further 6 months will only be provided on the basis that you confirm to us before the expiry of the initial period of 6 months one of the following:

  • that you are intending to move back into the Property at the end of the 12 month period and will provide evidence to that fact;
  • that the Property will be marketed for sale and that the current tenancy will not be extended beyond the 12 month period; or
  • that you will increase your equity stake in the Property to discharge the Scottish Government's security before the end of the 12 month period.

Please be advised, you are required to provide Agent with the current address you temporarily reside at, and a contact number. We must be notified of any changes to this during the period of the let. We must be able to contact you at any time, in respect of the temporary let of your shared equity property.

Please contact me if there is any further information you require.

Yours sincerely

Annex 5(J) - Application to extend let of Property for a temporary period of time

Please complete and return to Agent's details .

Please complete your Solicitor's/Letting Agent's name, address, contact number and email in the opposite section:

Name:

Address:

Tel:

Email:

Please state the reason for wishing to let the property for a temporary period. (We may ask for additional evidence to support your request)

Temporary move for work/study (Please provide a contract of employment or course details)

Moving to a new area (please provide details below)

Travelling for a temporary period (please provide details below)

Unable to sell property due to negative equity (Please provide a property valuation report and evidence of current mortgage balance)

Other (or further information) - please specify

When did the let originally start?

For how long do you envisage the property will be let?

Please provide us with payment of Agent's Fee (incl. of VAT). You may do this be either contacting us at the number shown on the letter or by providing us with a cheque payable to Agent's details .

Full name

Full Address

Email:

Tel:

I/We hereby give consent for Agent to discuss my/our personal information with the above agents. I/We will inform Agent of any changes in respect of my/our address and contact numbers. My/Our current address I/we temporarily reside in is:

Address:

Full Name:
Full Name:
Date:


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