When a leaseholder wants to purchase additional shares in their Shared Ownership property, they can do so through a process called staircasing. Final staircasing refers to a purchase which gets you from any share to owning 100% of the equity. If you are looking for the guide on interim staircasing click here.
If you are a leaseholder looking to undertake final staircasing, it is important to understand the legal process involved. Here is a step-by-step guide to help you navigate through the process:
1) You apply for final staircasing and appoint a solicitor
When you submit an application to interim staircase to your Housing Association, you typically have to let them know who your solicitors are who will represent you. We have also written a guide on how to choose your staircasing solicitors. The reason for this is that the Housing Association solicitors will produce a staircasing pack and send that over to your solicitors.
2) The Housing Association appoints their solicitors
The first step for the Housing Association solicitors is to review the Memorandum of Sale, essentially a simple document which outlines the financials of the transaction, how much you’re looking to purchase, what the value of the property is and how you’re looking to fund that purchase.
3) Housing Association solicitors check for charges or restrictions
Once they know about the transaction, the Housing Association solicitors will seek to obtain copies of the Leaseholder’s and Housing Association’s title from the Land Registry, from which they can determine whether there are any restrictions or charges on the property in favour of the Housing Association, the lender or the management agent.
If there are charges, the Housing Association solicitors will have to contact the third party with the benefit and get their consent for the transaction via a Certificate of Consent.
4) A Memorandum of Staircasing is produced and sent to the leaseholder solicitors
The next step is to put together a Memorandum of Staircasing, which is a formal document that contains all of the relevant information about the transaction and which will ultimately be signed and uploaded to the Land Registry. Once this is drafted it is sent to the leaseholder solicitors. What is a memorandum of staircasing? Find out more here.
5) Leaseholder solicitors receives and reviews staircasing documents
The leaseholder solicitors will review the memorandum of staircasing, as well as any accompanying notes and title documents and raise any relevant enquiries. If there are no enquiries they simply approve the documents, otherwise they go through the same process as the Housing Association solicitors in having to seek permissions from third parties and having to get a certificate of compliance signed.
6) Housing Association solicitors draft the Transfer Deed
The Housing Association’s solicitor drafts the Transfer Deed, either TR1 (transfer of whole) or TP1 (transfer of part) and issues it to the leaseholder’s solicitor. Here is the Land Registry's guidance on how to complete a TR1.
7) Memorandum of Staircasing and Transfer Deed is circulated for signature and a completion date is set
Once the leaseholder solicitors have approved all the documents and the Housing Association solicitors have approved the mortgage offer, the Memorandum of Staircasing and the Transfer Deed is circulated for signature to both the Housing Association and the leaseholder. At this point a completion date is set. To complete a transaction you need both parties to have signed the Memorandum of Staircasing and the Transfer Deed, and the Housing Association solicitors must have received the funds.
8) Completion day
On the date of completion, the lender will wire the funds to the leaseholder’s solicitors, who will then forward this onto the Housing Association solicitors. Both parties will also sign their part of the Memorandum of Staircasing and the Transfer Deed and date the documents in accordance with the completion statement. Finally, each set of solicitors will send their client’s signed Memorandum of Staircasing and Transfer Deed to the other party’s solicitor for safekeeping.
9) Documents are uploaded to the Land Registry
It is the leaseholder’s solicitor’s obligation to register the Transfer Deed at the Land Registry together with a copy of any lender consents and compliance certificates and to register the leaseholder’s charge if there is a mortgage.